Saudi foreign reserves fall at fastest in at least two decades
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Wednesday
February 08, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
WEDNESDAY, FEBRUARY 08, 2023
Saudi foreign reserves fall at fastest in at least two decades

Global Economy

Reuters
29 April, 2020, 04:00 pm
Last modified: 29 April, 2020, 04:37 pm

Related News

  • HAAB announces private hajj package at minimum cost of Tk6.72 lakh
  • Women drive fast train to Mecca as Saudi workforce evolves
  • Saudi Arabia to offer up to 200,000 jobs to Sri Lankans in 2023
  • Saudi Arabia's got the money, but can it draw foreign capital?
  • Saudi Arabia reduces Umrah insurance cost for overseas pilgrims by 63%

Saudi foreign reserves fall at fastest in at least two decades

The nearly $27 billion decline signals the kingdom’s urgent need to tap into its vast reserves to offset the economic damage following lower oil prices and a severe coronavirus-driven slowdown of entire sectors of its non-oil economy

Reuters
29 April, 2020, 04:00 pm
Last modified: 29 April, 2020, 04:37 pm
View shows the King Abdullah Financial District, north of Riyadh, Saudi Arabia, March 1, 2017/Reuters
View shows the King Abdullah Financial District, north of Riyadh, Saudi Arabia, March 1, 2017/Reuters

Saudi Arabia's central bank foreign reserves fell in March at their fastest rate in at least 20 years and to their lowest since 2011, while the kingdom slipped into a $9 billion budget deficit in the first quarter as oil revenues collapsed.

Saudi Arabia, the world's largest oil exporter, is facing an unprecedented challenge this year as oil prices have plumbed historic lows.

At the same time, measures to contain the spread of the new coronavirus are likely to curb the pace and the scale of sweeping economic reforms launched by Crown Price Mohammed bin Salman.

The Saudi Arabian Monetary Authority said on Tuesday its net foreign assets, which include securities such as US Treasuries and foreign deposits, fell in March to $464 billion, their lowest since 2011.

The nearly $27 billion decline - the biggest monthly drawdown in at least 20 years - signals the kingdom's urgent need to tap into its vast reserves to offset the economic damage following lower oil prices and a severe coronavirus-driven slowdown of entire sectors of its non-oil economy.

Finance Minister Mohammed al-Jadaan said last week the kingdom would not draw down more than $32 billion from its reserves this year and would instead increase its borrowing to nearly $60 billion to contain a widening deficit.

Early on Wednesday the finance ministry reported a first quarter budget deficit of $9 billion, mostly because of a drop in oil revenues, that reversed a first quarter surplus of around $7.4 billion in 2019.

Oil revenues in the first three months of the year posted a 24% annual decline to $34 billion and pushed total revenues down 22% year on year, the ministry said.

Saudi Arabia, which had registered more than 20,000 coronavirus cases as of Tuesday with 152 deaths, had projected a deficit of $50 billion this year, or 6.4% of gross domestic product (GDP), widening from around $35 billion last year.

But that was before the coronavirus and the plunge in oil prices. Jadaan has said the deficit could widen to up to 9% of GDP this year, but some analysts have predicted a deficit of 22% with oil prices at $30 a barrel.

International oil prices have shed around two thirds of their value since the start of this year and are trading around $21.

"If Finance Minister al-Jadaan's plans are for merely $32 billion of reserves drawdown then, following a $27 billion reduction in March alone, that means almost all the remainder will be covered by new sovereign debt issuance, assuming there are no further privatisations, because of market conditions," Hasnain Malik, head of equity strategy at Tellimer, said.

Slowdown

The Organization of the Petroleum Exporting Countries and other large oil producers, including Russia, have agreed to cut output by almost 10 million barrels per day (bpd), or 10% of global oil production, in May-June, in an attempt to balance the market.

While the size of the output cuts is unprecedented, demand has fallen even more and storage for all unused oil is filling fast as global measures to combat the pandemic have brought many economies to a virtual standstill.

Jadaan said last week he expects the pandemic to cause a slump in activity in the non-oil private sector too this year and that the government could launch measures to prop up its economy on top of $32 billion in emergency stimulus measures announced last month.

Non-oil revenues in the first quarter fell 17% when compared to the same period one year earlier, with revenues from taxes on goods and services plunging, in a sign of overall economic slowdown in the kingdom.

Saudi Arabia has already cut its 2020 budget by nearly 5% and further spending curbs are likely.

In Q1, however, capex spending declined only 4%, the finance ministry said.

Riyadh last month raised its debt ceiling to 50% of GDP from 30%. It has already borrowed $12 billion in international bonds this year.

Top News / World+Biz

Saudi Arabia / Saudi foreign reserve / Saudi Arabia economy

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • RMG turns to India from China to get cheaper man-made yarn
    RMG turns to India from China to get cheaper man-made yarn
  • Country's revenue earnings were Tk40,000cr more in last fiscal: Finance Minister
    Country's revenue earnings were Tk40,000cr more in last fiscal: Finance Minister
  • The world's richest person is trying to head off a succession battle
    The world's richest person is trying to head off a succession battle

MOST VIEWED

  • Sacks of refined sugar at a store in New Delhi, India.Photographer: T. Narayan/Bloomberg
    The world is about to have more sugar than it needs. So why have prices surged?
  • A policeman walks past the Supreme Court building in Islamabad, Pakistan October 31, 2018. REUTERS/Faisal Mahmood/File Photo
    Pakistan supreme court orders taxpayers to deposit 50pc super tax in seven days
  • A wooden case holding US dollars bills on display at the Sara-e Shahzada exchange market in Kabul in October 2022.Source: Bloomberg
    Dollars smuggled from Pakistan provide lifeline for the Taliban
  • Photo: Collected
    Indonesia to review its palm oil export quota ratio -ministry
  • People wait their turn to get fuel at a petrol station, in Karachi, Pakistan June 2, 2022. Picture taken June 2, 2022. REUTERS/Akhtar Soomro/File Photo
    Pakistan, IMF grapple for consensus to unlock critical funding
  • Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. REUTERS/Amir Cohen/File Photo
    Adani sell-off extends; India's opposition lawmakers launch protests

Related News

  • HAAB announces private hajj package at minimum cost of Tk6.72 lakh
  • Women drive fast train to Mecca as Saudi workforce evolves
  • Saudi Arabia to offer up to 200,000 jobs to Sri Lankans in 2023
  • Saudi Arabia's got the money, but can it draw foreign capital?
  • Saudi Arabia reduces Umrah insurance cost for overseas pilgrims by 63%

Features

Photo: Reuters

A tragedy that will also shake up the region's geopolitics

9h | Panorama
Nimah designed by Compass Architects- Wooden tiles. Photo: Junaid Hasan Pranto

Trendy flooring designs to upgrade any space

19h | Habitat
Benefits of having high ceilings in your new home

Benefits of having high ceilings in your new home

19h | Habitat
Each Reverse Osmosi plant can produce approximately 8,000 litres of drinking water a day for around 250 families. Photo: Sadiqur Rahman

A drop in the ocean of persistent water crisis

20h | Panorama

More Videos from TBS

30% companies see double-digit growth even in hard times

30% companies see double-digit growth even in hard times

11h | TBS Insight
Challenging time waiting for RMG

Challenging time waiting for RMG

18h | TBS Round Table
"Full Moon Meditation" organized by Department of Theater and Performance Studies, University of Dhaka

"Full Moon Meditation" organized by Department of Theater and Performance Studies, University of Dhaka

18h | TBS Graduates
10 cricketers who have played over 400 T20 matches

10 cricketers who have played over 400 T20 matches

18h | TBS SPORTS

Most Read

1
Photo: Courtesy
Panorama

From 'Made in Bangladesh' to 'Designed in Bangladesh'

2
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

3
Master plan for futuristic Chattogram city in the making
Districts

Master plan for futuristic Chattogram city in the making

4
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

5
Belal Ahmed new acting chairman of SIBL
Banking

Belal Ahmed new acting chairman of SIBL

6
Photo: Collected
Crime

Prime Distribution MD Mamun arrested in fraud case

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]