Saudi Arabia has managed to keep the level of its foreign exchange reserves stable at $659.5 billion at the end of October, according to local media.
The reserves have remained stable and at the same level for the last four months. The stability was a result of the Kingdom’s drive to tap into different sources of funding, other than the foreign exchange reserves.
Among the options that the Kingdom chose were the issuance of government bonds to meet spending and to bridge budget deficit arising out of the sharp drop in oil prices.
In view of the decline in oil prices and heavy government spending, the Kingdom withdrew $245.1 billion from the forex reserves during the first six months of the current year, bringing them down to $659.5 billion at the end of June from $904.6 billion, a decrease of 20 percent.
However, the government stopped withdrawing from the reserves as of July 2015 following the issuance of government bonds worth SR15 billion in June. That was the first time since 2007 that the government took the bond market route.
In July this year, the reserves went up to $659.5 billion compared to the June figures and since then have stabilized at that level.
The price of oil dropped by 60 percent since last June. It now stands at $45 per barrel compared to $115 in June last year.
AFP
