The reduction of Saudi foreign exchange reserves to the lowest level in the last 13 years

According to the report of Fars International Economic Group, quoting Rashatudi of the Central Bank of Saudi Arabia, the country’s foreign reserves have reached their lowest level in the last 13 years last month. Probably, the change in the way of spending oil revenues was the cause of this decrease.

According to these statistics, Saudi Arabia’s net foreign assets decreased to 1.538 trillion riyals ($410 billion) in April, which shows a drop of 8.8 billion dollars compared to March.

Saudi Arabia’s foreign assets fell for the fifth consecutive month, marking the longest period of decline since early 2019.

Currently, these reserves are down more than 44 percent from their August 2014 high of $737 billion, and are at their lowest level since April 2010, when they reached $418 billion.

“The recent decline in these reserves has coincided with a reduction in the government’s injection into reserves,” Mohammad Abubasha, head of macroeconomic research at EFG Hermes investment bank in Cairo, told Bloomberg.

Saudi Arabia, the world’s largest oil exporter, has traditionally relied on profits from the sale of crude oil and deposits a significant portion of this money into its reserve fund.

However, last year the country’s government pledged to separate government spending from oil revenues but prefers to keep these funds in its current account until the finance committee decides how to allocate them.

Due to the sharp increase in the price of crude oil, Saudi oil revenues reached a record 326 billion dollars last year, which helped the country’s government to have a financial surplus of 27.7 billion dollars for the first time in a decade.

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