Saudi Arabia, the world’s largest oil exporter, may be forced to tap its reserves to fund spending programs as oil prices drop below the kingdom’s breakeven budget price.
King Abdullah this year announced a $130 billion plan to create jobs and build homes after uprisings toppled leaders in Tunisia, Egypt and Libya. While officials haven’t said whether they’ll sell debt or draw on reserves, as they did two years ago, an oil price below an $85 to $90 breakeven level as estimated by Citigroup Inc. may force them to act.
The central bank’s total assets fell 0.3 percent to 1.93 trillion riyals ($515 billion) in August from July, according to data from the Saudi Arabian Monetary Agency. It was the first monthly decline since February, when the assets fell 0.4 percent. The Riyadh-based bank didn’t respond to telephone calls and a fax seeking comment on the reason for the decrease.
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