Saudi Arabia reserves grew in July from lowest level since 2010

Saudi Arabia’s net foreign assets rose slightly in July even as crude prices lingering below $50 a barrel kept the coffers of the world’s largest oil exporter under pressure.

The stockpile grew by SAR1.61bn ($429m), a rise of around 0.1 per cent, according to a monthly report from the Saudi Arabian Monetary Authority, the kingdom’s central bank, on Sunday.

Reserves in June had fallen to SAR1.66 trillion, the lowest level since 2010.

Officials attributed a record cumulative decline of more than $47bn in March and April to a $40bn transfer from the central bank to the sovereign wealth fund, intended to support investments abroad to take advantage of market turmoil during the coronavirus pandemic.

Saudi Arabia has suffered from a simultaneous decline in oil and non-oil revenue this year as the global pandemic combined with lower energy prices to jolt the kingdom’s public finances.

Officials have taken unprecedented measures in response, including tripling value-added tax.

The government could still face a budget deficit of over 13 per cent of gross domestic product in 2020, according to the median of forecasts compiled by Bloomberg.

Finance Minister Mohammed Al-Jadaan has said the kingdom will double its borrowing plans this year to soften the impact on the state’s reserves, which it needs to maintain above a certain level to support the kingdom’s currency peg to the dollar.