Saudi Arabia’s holdings of US Treasuries as a portion of foreign assets held by its central bank rose in October to the most in four years.
US Treasuries as a portion of total foreign assets held by SAMA, as the Saudi Central Bank is known, rose to almost 35% last month, according to data compiled by Bloomberg. That puts them at the highest level since February 2020 at the onset of the coronavirus pandemic.
The country’s investments in the US government bonds has been rising this year and SAMA now holds $144 billion in US Treasuries even as its total foreign assets has fallen to the lowest since February.
Although the latest increase came before the US election in November, larger Saudi holdings of US government bonds may help the kingdom’s relationship with the incoming administration of President Donald Trump.
Saudi Arabia’s de facto ruler Crown Prince Mohammed Bin Salman enjoyed a close relationship with Trump during his first term, something that is expected to continue once the US billionaire returns to the White House. In a sign of how Saudi Arabia has already been positioning itself to get close to the new US administration, Yasir Al Rumayyan, the head of Saudi Arabia’s sovereign wealth fund and a close ally of Prince Mohammed, sat next to the president-elect at a UFC match in New York earlier this month.
SAMA declined to respond to a Bloomberg request for comment.
In February 2020, SAMA’s US T-bill holdings had peaked at over 37% of foreign assets, before falling rapidly as the Saudi government tapped its reserves to fund a $40 billion transfer to its sovereign wealth fund to buy up stocks hit by investors panicking about the impact of coronavirus.
Saudi Arabia’s foreign assets have fallen from almost $500 billion at the start of 2020 to around $411 billion at the end of October, partly because of the transfer to the PIF, but also as it dips into reserves to help fund government spending.
