Saudi assets cross SR2,000bn for first time

Saudi Arabia’s foreign assets gained nearly SR74 billion to cross the SR2,000 billion mark for the first time since the world’s dominant oil exporter began pumping crude seven decades ago, official data showed on Saturday.

The assets, controlled by the Saudi Arabian Monetary Agency (WAMA), the Gulf Kingdom’s central bank, peaked at an all time high of SR2,001.7 billion ($533.5 billion) at the end of September, an increase of nearly SR74 billion over their level of SR1,926 billion ($514 billion) at the end of August.

The surge was a result of higher oil prices and output by the largest Arab economy and it followed a slight fall of nearly SR six billion in August.

Growth was in both deposits with banks abroad and investment in foreign securities while there was small increase in other asset components.

From SR1,365 billion at the end of August, investment in foreign securities soared to nearly SR1,387 billion at the end of September while deposits with banks abroad surged from SR357.2 billion to SR390.8 billion, SAMA said in its monthly bulletin for September.

Since the end of 2010, SAMA’s foreign assets have gained a whopping SR296 billion ($80 billion) as a result of higher oil prices and the country’s crude production, which has remained above nine million bpd this year.

Oil prices averaged around $105 in the first nine months of 2011, nearly $45 above Saudi Arabia’s budget forecasts.

Saudi Arabia’s foreign assets have steadily grown in most of the past 10 years as a result of strong crude prices, gaining nearly SR135 billion through 2010.

They recorded one of their largest increases of around SR513 billion during 2008, when oil prices climbed to their highest annual average of nearly $95 a barrel. But a sharp fall in crude prices depressed them by SR139 billion in 2009 to widen the actual budget shortfall to nearly SR87 billion following a record high surplus of nearly SR580 billion in the previous year.

In 2010, the budget reverted into a surplus of SR109 billion after oil prices increased by at least $15 a barrel. For 2011, Saudi Arabia announced another record high budget of SR580 billion for 2011, with a deficit of SR40 billion.

But analysts believe the fiscal shortfall will again revert into a surplus at the end of the year on the grounds the oil price assumed by Riyadh of nearly $60 a barrel will be far below the expected actual price.

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