By Staff writer
Jadwa Investment says slump in funds reflect the resumption of government payments to contractors
A record SR136 billion ($36.2 billion) monthly fall was recorded in government accounts held by the Saudi Central Bank in October, reflecting the resumption of government payments to contractors, according to new research.
Jadwa Investment's latest monthly report also said that foreign reserve assets held by Saudi Arabian Monetary Agency (SAMA) fell by $11 billion in October, the third largest decline in 2016.
Last month, it was reported by local media that Saudi Arabia's government had made payments of SR40 billion that it owed to private sector companies.
Jadwa's research noted that total bank deposits in the Gulf kingdom increased by SR27.1 billion in October, rising by its fastest pace in 13 months while the Saudi consumer price index slowed for the seventh consecutive month.
"September data showed both non-oil exports and imports falling. We see falling imports as a reflection of a stronger riyal (due to a strengthening US dollar) rather than weaker demand," Jadwa said in the report.
Year-to-September data on the monthly value of oil exports showed the kingdom earning $96 billion in oil export revenue, compared with $128 billion during the same period in 2015.
Jadwa said positive sentiment from Saudi Arabia’s international bond sale in October and a recommencement of payments to contractors by government, pushed the country's stock market up by 16 percent month-on-month in November, with the net-income of listed companies totalling SR28.3 billion in Q3, which was flat year-on-year.