RIYADH, April 30: Extended high oil prices over the first quarter of the year have resulted in Saudi Arabia’s money supply (M3) growing by five per cent in the first quarter of this year to SR506.6 billion ($135.1bn), the central bank statistics showed, extending last year’s sharp rise. M3 grew 3.46 per cent in March after a slight fall of 0.47pc in February and a 1.99 per cent rise in January, the daily Arab News said quoting figures posted on the website of Saudi Arabian Monetary Agency (SAMA).

But the first quarter figures also suggested that the trend of steep money supply growth is continuing into 2005. Last year the Saudi money supply grew by 17.2pc — the highest level since the last oil boom a quarter century ago — as revenues flowed into the world’s biggest crude exporter. High levels of liquidity in the kingdom have helped drive the Saudi stock index higher for a third successive year.

The SAMA’s first quarter balance sheet also showed the central bank’s foreign assets grew 10.7pc in the first three months of the year to SR363.4 billion.

Investment in foreign securities rose 18pc to SR232.8 billion while deposits with banks abroad were barely changed since December at SR48.7bn and foreign currencies convertible to gold eased slightly to 81.8bn. Foreign securities investment has now doubled in the last six months.

The Saudi central bank gave no details of those investments though economists believe much of the money has been put into US treasury bills.

The SAMA figures also showed that bank lending to the private sector continued to grow sharply in the first quarter, rising 8.22 per cent to SR339.7bn. It has grown 40.8pc in the year to March. But the ratio of the banks’ private sector loans-to-deposits grew more modestly in the three months to March to 75.86pc from 74.34 per cent.