The effect of interest rate and inflation on bank deposits in the Kingdom of Saudi Arabia from 1995 to 2018

Mohammad, Elsiddig Yousif; Bachouche, Hamid Abdelkader

مجلة القيمة المضافة لاقتصاديات الاعمال
Volume 1, Numéro 2, Pages 67-84
2020-06-30

The Effect Of Interest Rate And Inflation On Bank Deposits In The Kingdom Of Saudi Arabia From 1995 To 2018

Authors : Mohammad Elsiddig Yousif . Bachouche Hamid Abdelkader .

Abstract

This study aimed to analyze some factors affecting the size of credit deposits in Saudi banks, and to answer the questions of the study, we relied on the theoretical framework on the literature and previous relevant studies, we presented a standard study using the ARDL model; this study concluded that there is a long-run balance relationship between the credit deposits interest rate and the inflation rate, also there is an equitable balance between inflation rates and bank deposits, and There is long term inverse relationship between the interest rate and bank deposits, This means that if interest rates rise, the size of bank deposits will decrease, in addition to a correlation between inflation rates and bank deposits, if the inflation rate increases, the size of bank deposits also increases, and this reflects the effective role of bank deposits in increasing economic and investment activity in the Saudi Arabia's economy.