After the US government’s first-ever release quantifying Saudi Arabia’s Treasuries holdings, a question echoed through Wall Street: That’s it?
The kingdom held $116.8 billion of Treasuries as of March, according to data that the Treasury Department released Monday in response to a Freedom-of-Information Act request submitted by Bloomberg News. It’s the first time the US disclosed a breakdown for the world’s biggest oil exporter, after lumping it in with a group of other oil producers since 1974.
The tally is about 20 per cent of the country’s $587bn of foreign reserves, and roughly 10 per cent of the stockpiles of China and Japan. The figure is also dwarfed by the $750bn of Treasuries and other dollar-denominated assets the kingdom threatened to sell if Congress passes a bill allowing the monarchy to be held liable in US courts for the September 11, 2001, terror attacks, the New York Times reported in April.
While the tally solves one puzzle, it introduces another: Central banks typically keep about two-thirds of reserves in dollar-denominated assets, according to the IMF. And because Saudi Arabia’s riyal is pegged to the dollar and its main export - oil - is priced in the greenback, the kingdom should keep an even larger share of reserves in dollar-denominated securities like Treasuries, according to strategists.
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• Comment: From the US to Middle East, new era of transparency falls upon us
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That leaves just a few options for the remaining dollar-denominated investments, if they exist. The kingdom’s reserve fund may hold fewer dollar-denominated securities than most expect, it may be parking securities in custody at the Federal Reserve Bank of New York or elsewhere, or it may own other securities that don’t show up in the Treasury’s data, such as stocks, derivatives or non-government debt.
“They could have positions in futures that wouldn’t be counted in here,” or holdings in another country, said Thomas Simons, a money-market economist in New York with Jefferies Group, one of the 23 primary dealers. But the puzzle is the amount of assets the nation would need to hold elsewhere, he said. “We’re talking about more than twice what they have domestically.”
“It’s nice to know this,” although “the Saudis may own much more in holdings through entities in third countries,” said David Wessel, a senior fellow in economic studies at the Brookings Institution in Washington.
A chunk of central-bank ownership of Treasuries isn’t reflected in the data. Global central banks have $2.9 trillion of custody holdings with the Fed, on top of the $6.3tn of foreign holdings of US government debt tracked by the Treasury.
A Treasury spokeswoman, Whitney Smith, said that ownership of Treasuries by Saudi residents is near a record high. The data indicate that the nation’s holdings have dropped 6 per cent from a peak in January. That trend doesn’t necessarily send an alarming signal though, given that the trove was below $100bn as recently as 2014.
“It’s not necessarily a bad picture at all,” said Aaron Kohli, a fixed-income strategist in New York for BMO Capital Markets, a primary dealer. “A lot of people make unwarranted assumptions about the amount of sales from some corners of the world,” but “it looks like the opposite has been happening.”
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The five stages of early child’s play
From Dubai-based clinical psychologist Daniella Salazar:
1. Solitary Play: This is where Infants and toddlers start to play on their own without seeming to notice the people around them. This is the beginning of play.
2. Onlooker play: This occurs where the toddler enjoys watching other people play. There doesn’t necessarily need to be any effort to begin play. They are learning how to imitate behaviours from others. This type of play may also appear in children who are more shy and introverted.
3. Parallel Play: This generally starts when children begin playing side-by-side without any interaction. Even though they aren’t physically interacting they are paying attention to each other. This is the beginning of the desire to be with other children.
4. Associative Play: At around age four or five, children become more interested in each other than in toys and begin to interact more. In this stage children start asking questions and talking about the different activities they are engaging in. They realise they have similar goals in play such as building a tower or playing with cars.
5. Social Play: In this stage children are starting to socialise more. They begin to share ideas and follow certain rules in a game. They slowly learn the definition of teamwork. They get to engage in basic social skills and interests begin to lead social interactions.
Killing of Qassem Suleimani
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
What is dialysis?
Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.
It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.
There are two kinds of dialysis — haemodialysis and peritoneal.
In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.
In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.
It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.
