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Saudi Arabia’s net foreign assets fell 0.83 percent in May compared to April, central bank data showed on Monday.
Saudi Central Bank’s (SAMA) net foreign assets fell by 13.65 billion riyals ($3.64 billion) to 1.62 trillion riyals ($432.6 billion), according to the bank’s monthly report.
“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.
While reserves are drifting lower they have largely been stable since Q2 2020. Since May, oil prices have jumped considerably which should also help to replenish Saudi Arabia’s reserve position, it added.
The foreign assets were also lower than the 1.66 trillion riyals recorded in May 2020.
Investments in foreign securities totaled 1.11 trillion riyals in May this year, dropping over 1 percent compared to the previous month.
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. In the first quarter of this year, the share of oil exports to total exports dropped to 71.8 percent from 74.6 percent in the year-ago period.
However, IMF has projected a real GDP growth of 2.1 percent this year and 4.8 percent in the next.
(Reporting by Brinda Darasha; editing by Daniel Luiz)
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