Saudi Arabia’s net foreign assets fell again in May by 0.8% after reaching a 10-year low last month, according to reports, but higher oil prices should boost government figures in the coming months as the Kingdom ramps up production to meet demand.
The assets at the kingdom’s central bank fell by 13.65 billion riyals ($3.64 billion) according to the bank’s monthly report.
As Bloomberg notes, the Kingdom’s net foreign assets stood at $700 billion in 2014 after an oil boom pumped up savings — but now stands at 1.62 trillion riyals ($432 billion).
“Reserves are at their lowest level since the end of 2010 as the enormous build up during 2011-14, catalyzed by oil prices at more than $100/b has been eroded over the past years thanks to low and volatile oil prices,” said Emirates NBD in a note, according to Zawya.
However most economists say that’s the Kingdom’s current holdings are more than enough to defend the Saudi riyal’s peg to the dollar, and rising oil prices could boost the fortunes of the world’s largest crude exporter in the months ahead,” according to Bloomberg.
The economy of the world’s top oil exporter contracted 4.1 percent last year, but the rate of decline has slowed in recent months as some COVID-19 restrictions were lifted and more economic activities resumed.
