According to a statement issued by the Saudi Arabian central bank on August 25, M1 money supply growth in Saudi Arabia, an indicator of future inflation, increased to 14.2 percent in July from 10.9 percent in June.
Meanwhile, the growth of Saudi Arabian M2 money supply, which includes time and savings deposits, was 14.2 percent in July, down from 15.8 percent the previous month.
In addition, the growth of the country's M3 money supply, including demand deposits and currency outside banks, slowed down to 15.3 percent in July compared to 16.4 percent in June.
In July, the Saudi Arabian Monetary Agency's foreign assets decreased to SAR 1.43 trillion ($380 billion), as deposits with banks abroad and investments in foreign securities declined.
The Saudi central bank is drawing on assets to fund a five-year, $400 billion spending program to boost the country, the world's number one oil producer, through the financial crisis. Oil prices have recently plummeted from last year's peak of $147.27/barrel to around $74/barrel. The central bank added that the country's private sector grew by 3.6 percent year on year in July, compared to 5.6 percent in the previous month. In July, Saudi Arabia's bank credits to the private sector rose by 0.02 percent, up from SAR 728.8 billion in June.
In July, Saudi Arabia's inflation slowed down to 4.2 percent in July compared to 5.2 percent in June.