Saudi Arabia Not Worried About U.S. Debt Limit

The central bank of Saudi Arabia, one of the world’s top holders of U.S. government bonds, said on Saturday it was not worried by the political deadlock in Washington that could cause the United States to default on its debt.

Asked if he was concerned, central bank governor Fahad al-Mubarak told reporters: “No. They have been there before and it has been resolved.” He did not elaborate.

Mubarak was speaking on the sidelines of meetings of Gulf Arab monetary and finance officials in Riyadh.

Saudi Arabia, the world’s biggest oil exporter, ploughs much of its earnings back into U.S. assets. Most of the central bank’s net foreign assets of $690 billion are believed to be denominated in U.S. dollars, and much of that amount is in the form of U.S. Treasury bonds.

Speaking privately at a meeting in Abu Dhabi earlier this week, some other monetary officials of oil-rich Gulf countries also expressed confidence that Washington would eventually resolve its political impasse without damaging global markets.

The U.S. Congress must agree on a measure to raise the nation’s $16.7 trillion debt ceiling by October 17 or risk a U.S. government debt default.