Saudi net reserves fall to US$410 billion, lowest since 2010

SAUDI Arabia’s net foreign assets fell to 1.538 trillion riyals (S$555 billion) in April, the lowest since January 2010, even as the government forecasts a second annual budget surplus this year.

Foreign reserves fell from 1.572 trillion riyals the previous month, according to the central bank’s monthly report published on Sunday (May 28). It’s the fifth month that reserves have declined, the longest falling streak since early 2019.

Saudi Arabia returned to the debt market earlier this month by selling US$6 billion of Islamic bonds. The kingdom already reported a deficit of 2.91 billion riyals in the first quarter of the year.

The International Monetary Fund forecasts the world’s top crude exporter will run a budget deficit of 1.1 per cent of gross domestic product this year, a view that’s at odds with the government’s expectation for a second straight surplus it last estimated at 16 billion riyals.

The Washington-based lender hiked its estimate of the oil price Saudi Arabia needs to balance its budget this year to over US$80 a barrel. The kingdom doesn’t reveal an oil price assumption in its budget. BLOOMBERG