Saudi central bank net foreign assets drop 1.7% on month in April

Net foreign assets at Saudi Arabia’s central bank fell to SAR2.546 trillion ($678.8 billion) in April, down by $11.8 billion or 1.7 per cent from the previous month as the kingdom drew on its reserves to cover a budget deficit caused by low oil prices.

Assets dropped 6.8 per cent from a year earlier to their lowest level since May 2013, central bank data showed on Thursday.

The central bank acts as the country’s sovereign wealth fund, storing its huge earnings from oil exports. Although the assets’ year-on-year drop is partly due to the strong U.S. dollar, which has cut the value of the portion denominated in non-dollar currencies, it is partly due to a fiscal drawdown, analysts say.

Net foreign assets fell by $16.0 billion in March from the previous month, and by $20.2 billion in February. They peaked at a record $737 billion last August.