© Bloomberg. An employee walks past the crude oil storage tanks at the Juaymah Storage Farm at the Ras Tanura Oil Refinery and Oil Terminal in Ras Tanura, Saudi Arabia on Monday, October 1, 2018. Saudi Arabia looks to transform its economy dependent on crude. by developing new industries and embarking on petrochemicals to take greater advantage of its energy deposits. Photographer: Bloomberg / Bloomberg
(Bloomberg) – Saudi Arabia’s net foreign assets edged up in July, even as crude prices remained below $ 50 a barrel kept the coffers of the world‘s largest oil exporter under pressure.
The stock rose 1.61 billion riyals ($ 429 million), an increase of about 0.1%, according to a monthly report from the Saudi Monetary Authority, the kingdom’s central bank, on Sunday. Reserves in June had fallen to 1.66 trillion riyals, the lowest level since 2010.
Officials attributed a record cumulative decline of over $ 47 billion in March and April to a transfer of $ 40 billion from the central bank to the sovereign wealth fund, intended to support overseas investment to take advantage of the turmoil in markets during the coronavirus pandemic.
Saudi Arabia has suffered from a simultaneous decline in oil and non-oil revenues this year as the global pandemic combined with falling energy prices to shake the kingdom’s public finances. The authorities have taken unprecedented action in response, including tripling the value added tax.
The government could still face a budget deficit of more than 13% of gross domestic product in 2020, according to the median forecast by Bloomberg.
Finance Minister Mohammed Al-Jadaan said the kingdom would double its borrowing plans this year to mitigate the impact on state reserves, which he must keep above a certain level to support the anchoring of the kingdom’s currency to the dollar.
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