The Saudi Arabian Monetary Agency’s (SAMA) net foreign assets stood at SR1.541 trillion ($ 410.93bn) in March, down from SR1.585 trillion in February, data published on the central bank’s website showed.
Although SAMA’s foreign assets rose by about 19 percent in March from their level a year earlier, they were at their lowest level since July, 2008.
The global financial crisis has battered global markets and oil prices have fallen around $ 100 from a record high near $ 150 in July, hitting both the revenues and the foreign holdings of many countries in the world’s largest oil-exporting region.
“The government is tapping into the foreign assets to support the budgeted spending amid these bad times,” said John Sfakianakis, chief economist at HSBC’s Saudi affiliate.
The drop in SAMA’s net foreign assets could indicate that the government is actually overspending since the average price of Saudi light crude rose to $ 48.9 per barrel in March, which is above the break-even point for the national budget.
“With the average price of oil above the budgeted price, the they could be overspending so they need to tap into foreign assets,” Sfakianakis added.
Annual growth in M3 money supply, the broadest measure of money in the Saudi economy, inched up to 15.8 percent in March from 15.6 percent in February and 13.8 percent in January.
However, M3 showed in March its poorest month-on-month performance this year after a drop in quasi-monetary deposits, which comprise residents’ foreign currency deposits and marginal deposits for letters of credit, and a slight decrease in currency outside banks.
Bank claims on the private sector, a key indicator of lenders’ confidence in the economy’s prospects, fell in March to its lowest level since August, 2008. At 728.13 billion riyals, it still rose 16.3 percent from its level in March, 2008.
