Saudi Arabia said yesterday it tapped its October domestic currency issue for the second time, selling 4.77 billion Saudi riyals (US$1.27bn) worth of Islamic bonds as the kingdom shores up funds to meet its financing needs.
Riyadh sold a five-year 2.4bn riyal, a seven-year 1.8bn riyal and a 10-year 475 million riyal tranches, the ministry of finance said. It sold 6.68bn riyals in the first tapping of the 10bn riyal October domestic issue.
Saudi Arabia, the world's biggest oil exporter, which is still dependent heavily on hydrocarbons revenues to fuel its economy, is issuing domestic Sharia-compliant bonds to bridge a fiscal deficit caused by low oil prices. The government in July began selling sukuk under a new programme, without specifying how much it planned to sell or the timeline for issuances.
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Saudi Arabia unveils biggest ever budget to propel growth
Saudi Arabia sells 7bn riyals worth of Islamic bonds
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This year, the kingdom has already sold a $9bn international sukuk in April and in September raised $12.5bn through a conventional bond deal to strengthen its funding buffers.
The Saudi government put on hold in October last year the sale of domestic conventional bonds after tapping the international debt capital market with its debut $17.5bn sovereign bond, the biggest deal by an emerging market nation.
Prior to the international sale, the government sold 20bn riyals through the sale of local currency bonds to banks and financial institutions each month since mid-2015 to help offset the impact of lower oil revenues.
The kingdom last week unveiled its biggest budget yet for 2018 to boost growth in the wake of fiscal consolidation and on lower crude output.
Saudi Arabia is forecasting a fiscal deficit of 195bn riyals for 2018 or 7.3 per cent of GDP, compared with a shortfall of 230bn riyals or 8.9 per cent of GDP in 2017.
The government, which issued 134bn riyals in debt in 2017 to finance the budget deficit, is projecting only 117bn riyals in debt issuance for 2018. Debt issuance should not exceed 30 per cent of the country's GDP, the finance ministry said.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Globalization and its Discontents Revisited
Joseph E. Stiglitz
W. W. Norton & Company
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