Saudi Arabia’s foreign reserves rose to the highest in 18 months after state-controlled oil producer Aramco boosted dividend payments.
Net foreign assets held by the kingdom’s central bank jumped 5% to $445 billion, or 1.67 trillion riyals, at the end of May, the highest since November 2022, according to figures released Sunday. That coincided with Aramco paying out more than $25 billion in dividends to the government the same month, up from about $18 billion a year earlier.
SAMA, as the central bank of the world’s biggest crude oil exporter is known, receives the governments dividends from Aramco.
The country has shifted its investment strategy over the past few years. It’s now keeping a lower proportion of foreign reserves as relatively low yielding, liquid assets such as US Treasuries. Under Crown Prince Mohammed Bin Salman, it’s sought bigger returns and taken on more risk both internationally and domestically, through building up the Public Investment Fund to almost $1 trillion.
SAMA’s reserves peaked at almost $740 billion in mid-2014, shortly before a big crash in oil prices.
Aramco has been boosting shareholder payouts as it looks to use cash accumulated during 2022’s period of high oil prices and production. The company said in May that it intended to hand shareholder’s $124 billion in dividends this year. The vast majority of that goes to the central government, which owns 81.5% of Aramco stock even after the latest secondary offering and transferring a 16% stake to the PIF.
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