Saudi Arabia’s reserves remained in the vicinity of SAR659.5 billion for the fourth consecutive month as the government continued to issue bonds as a means of financing its budget deficit and hefty public expenditure.
The figure has remained unchanged in the July-October period since the government has refrained from withdrawing any of the Kingdom’s reserves to offset the budget deficit and finance mega public venture projects.
In the first six months of the current year, the Saudi government withdrew a total of SAR245.1bn from the public reserves as oil prices took a downhill slope, according to data and analysis by Al Eqtisadiah.
The Kingdom’s current reserves are 20 per cent lower the SAR904.6bn recorded at the end of 2014, according to the data. In June this year, the Saudi government issued bonds worth SAR15bn for the first time since 2007.
Since June, the government has continued to sell bonds in an attempt to maintain the Kingdom’s reserves, as projections over an oil price rebound remain uncertain.
Oil prices have come down by roughly 60 per cent of their value since the beginning of the current year. Oil now stands at $45 a barrel compared with $115 in June last year.
Excess revenues of the Kingdom are transferred to its reserves and withdrawals can only be effected by a direct order from the king.
Despite the plunge in oil prices, the Saudi government has pledged to press ahead with major public and infrastructure investments across the country.
(SAR1 = AED0.97, at the time of publishing)