Saudi CB foreign assets shrink $7.4bn in Sept
DUBAI:
Net foreign assets at Saudi Arabia’s central bank fell by $7.4 billion to $546.7 billion in September from the previous month, as the government drew down reserves to cover a budget deficit caused by low oil prices, official data showed yesterday.
Assets shrank by 15.5 percent from a year earlier to their lowest level since January 2012. They reached a record high of $737 billion in August 2014 before starting to fall. The assets are believed to be mainly denominated in US dollars, in the form of securities such as US Treasury bonds and deposits with banks abroad.
Foreign bank deposits shrank $5.1 billion from the previous month to $114.4 billion in September. Holdings of foreign securities fell $3.5 billion to $372.7 billion. The government has also been borrowing domestically and abroad to cover part of its deficit, which totalled nearly $100 billion last year. Earlier in October, it raised $17.5 billion in its first international bond issue.
Total deposits at Saudi Arabian commercial banks edged up 0.2 percent from the previous month to 1.58 trillion riyals ($422.0 billion) in September.
Meanwhile, Saudi Arabia’s capital markets regulator approved rules for exchange-listed real estate funds yesterday, as part of efforts to ramp up investment in the kingdom’s housing market. The kingdom requires private money to help finance construction of around 1.5 million homes planned over the next seven or eight years. In a bid to ease a shortage of affordable housing, the government announced proposals to build the homes in June as part of an economic reform program.
The “real estate investment traded funds”, publicly offered and traded on the Saudi stock exchange, would invest in residential, commercial, industrial, and agricultural real estate, periodically distributing part of their income to holders of the fund. The rules, the draft of which was published by the Capital Market Authority in August, cover the management, operation and ownership of the funds, specifying for example that they would not be allowed to invest more than 25 percent of their assets outside Saudi Arabia. —Reuters