RIYADH: Banks deposits in Saudi Arabia and the UAE fell last month as low oil prices impacted balance sheets. In February, government deposits in Saudi Arabia dropped 6.6 per cent from SAR 291bn the previous month to SAR 271.8bn, according to Saudi Arabian Monetary Authority data.
The country’s M3 measure of money supply, including cash balances and bank deposits held by individuals, companies and the government fell for the first time in more than a decade.
Withdrawals from the kingdom’s ATMs fell by 13 per cent year-on-year in a sign of slowing consumer spending. Inflation in the country also rose to its highest level in more than thee years in January at 4.3 per cent.
In the UAE, central bank data showed government and government company deposits fell 15 per cent year-on-year in February to Dhs 158bn. Both countries have been forced to withdraw funds from the banking sector to finance growing fiscal deficits due to the low oil price.