Saudi Arabia’s net foreign assets fall to four-year low

Saudi Arabia’s net foreign assets fell for the 15th month in a row in April, as the kingdom announced its “vision” for a post-oil future.

The Saudi Arabian Monetary Agency said on Sunday net foreign assets declined 1.1 per cent to $572 billion, the lowest level in four years. The slump in crude prices has forced the government to sell bonds and draw on its currency reserves, still among the world’s largest. Net foreign assets fell by $115bn last year, when the kingdom ran a budget deficit of nearly $100bn.

The fiscal crunch has pushed Saudi Arabia’s rulers to look beyond oil, consider new taxes, and plan an initial public offering of state giant Saudi Arabian Oil Company. Deputy crown prince Mohammed bin Salman sketched out the planned changes dubbed Saudi Vision 2030 on April 25.

Brent crude declined for a third day, falling 0.5 per cent to $49.07 a barrel at 9.42am in Dubai, bringing the drop for the past year to 24 per cent. It traded above $100 a barrel two years ago.

The strain on reserves has also fuelled speculation that the kingdom will adjust its decades-old riyal peg to the dollar. New central bank Governor Ahmed Alkholifey told Al-Arabiya on Thursday that Saudi Arabia doesn’t plan to change its exchange rate policy.

Cash withdrawals from automated teller machines in the kingdom fell 3 per cent in March compared to the same month last year, a sign that the economic slowdown brought on by lower oil prices and government spending cuts is reaching consumers. Money supply shrank 1.5 per cent in April on the year.

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