Saudi central bank's foreign assets slump $11bn in June

Assets shrink 15.9% from a year earlier to their lowest level since early 2012
Saudi central bank's foreign assets slump $11bn in June
By Reuters
Fri 29 Jul 2016 12:01 AM

Net foreign assets at Saudi Arabia's central bank fell by $11 billion from the previous month to $562 billion in June as the government drew down its reserves to cover a budget deficit caused by low oil prices, official data showed on Thursday.

Assets shrank 15.9 percent from a year earlier to their lowest level since early 2012. They reached a record high of $737 billion in August 2014 before starting to drop.

The government has been seeking to slow the decline by financing part of its deficit through borrowing from abroad; it obtained a $10 billion syndicated loan from international banks in May. An international bond issue of similar size is expected in coming months.

The foreign assets are believed to be mainly denominated in US dollars, in the form of securities such as US Treasury bonds and deposits with banks abroad.

Deposits with banks abroad fell 5.8 percent from the previous month to $133 billion in June, while investments in foreign securities dropped 1.3 percent to $368 billion.

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