x Abu Dhabi, UAESaturday 22 July 2017

Saudi foreign reserves drop for fourth month to $672 billion

The kingdom is grappling with lower oil prices and the cost of the war in Yemen, though the pace of the drop has slowed.

Saudi Arabia’s foreign-reserve assets fell for a fourth month to about US$672 billion as the kingdom grapples with lower oil prices and the cost of the war in Yemen, though the pace of the drop did slow.

Net foreign assets fell about 24.7 billion riyals (Dh24.2bn) last month, bringing their decline since January to more than $50bn, the Saudi Arabian Monetary Agency said. The reserves had plunged by 180bn riyals in the previous three months.

King Salman, who came to the throne in January, started a bombing campaign against rebels in Yemen and moved ahead with domestic spending plans at a time when oil prices had fallen by about 60 per cent from their peak in June last year, prompting the IMF to predict a budget deficit this year of 20 per cent of economic output.

The government is using its deposits at the central bank to finance the shortfall, though analysts say it may soon turn to bond sales.

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