29 Oct 2017 - 18:31
Saudi foreign reserves continue slide, lowest since April 2011
DUBAI: The Saudi Arabian central bank’s foreign reserves continued falling in September, standing at their lowest since April 2011, as the government drew them down to cover a budget deficit caused by low oil prices, central bank data showed on Sunday.
The bank’s net foreign assets shrank by $2.4 billion from August to $477.6 billion, down 12.6 percent from a year earlier. They peaked at $737 billion in August 2014, before starting to drop in line with oil prices.
Central bank governor Ahmed al-Kholifey said last week that the pace of the reserves’ fall had slowed over the past three years and that their current level was very comfortable.
Any future falls will depend on the government’s fiscal policy, he noted, adding that he was pleased to see that fiscal policy had become more disciplined as Riyadh worked to cut the state budget deficit.
The assets are partly in the form of foreign securities holdings, which shrank in September by $4.1 billion from the previous month to $328.5 billion. Foreign bank deposits rose $1.1 billion to $90.2 billion. The vast majority of the assets are believed to be in U.S. dollars.
Outstanding bank loans to the private sector in September shrank 1.2 percent from a year earlier, showing the economy remained weak. It was the seventh straight month of falling bank lending.
(Reporting by Andrew Torchia; editing by Jason Neely)