Record Plunge in Saudi Reserves Only Prelude to Looming Drawdown - Bloomberg:
Saudi Arabia’s central bank depleted its net foreign assets in March at the fastest clip since at least 2000, showing the severity of the damage inflicted by the slump in oil prices even as the government is only starting to lean on the holdings to cover budget needs.
The drop of more than 100 billion riyals ($27 billion), or over 5% from the previous month, brought the stockpile to $464 billion, the lowest since 2011, according to data compiled by Bloomberg. In the first quarter, the government ran a budget deficit of 34.1 billion riyals, which was mostly covered by external and domestic borrowing, Finance Ministry data showed on Wednesday.
Economists say the world’s biggest oil exporter will have have to dig deeper into reserves despite scaling back spending and looking to rely more on debt to withstand the historic collapse in commodity markets. Crude sales account for the majority of the government’s revenue.
Saudi Arabia’s central bank depleted its net foreign assets in March at the fastest clip since at least 2000, showing the severity of the damage inflicted by the slump in oil prices even as the government is only starting to lean on the holdings to cover budget needs.
The drop of more than 100 billion riyals ($27 billion), or over 5% from the previous month, brought the stockpile to $464 billion, the lowest since 2011, according to data compiled by Bloomberg. In the first quarter, the government ran a budget deficit of 34.1 billion riyals, which was mostly covered by external and domestic borrowing, Finance Ministry data showed on Wednesday.
Economists say the world’s biggest oil exporter will have have to dig deeper into reserves despite scaling back spending and looking to rely more on debt to withstand the historic collapse in commodity markets. Crude sales account for the majority of the government’s revenue.
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