Saudi foreign assets see further m/m fall

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GLOBAL TURMOIL: Stock market shakeout and oil price weakness continued to impact Saudi foreign assets in March. (Getty Images)

Saudi Arabia's net foreign assets accelerated their month-to-month fall to 2.8 percent in March from 2 percent in February after the global crisis hit markets, official data showed on Monday.

The Saudi Arabian Monetary Agency's (SAMA) net foreign assets stood at 1.541 trillion riyals ($410.93 billion) in March, down from 1.585 trillion riyals 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.

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.

SAMA has more than halved the benchmark lending rate through successive cuts since October in a bid to both encourage banks to keep lending and make up for a possible decline in government financing due to lower revenues from oil exports.

But the cuts have failed to spur the sort of credit growth seen over the past few years.

SAMA data showed that long-term bank credit fell in March by 55.2 percent from its level a year earlier although it rose 1.3 percent from its level in the previous month. (Reuters)

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