Saudi Arabiaโs international reserve assets reached in May a 18-month high of SAR1.75 trillion ($467.5 billion), representing a 6 percent annual increase, according to new data from the Saudi Central Bank (SAMA).
These holdings include monetary gold, special drawing rights (SDRs), the International Monetary Fundโs (IMF) reserve position, and foreign currency reserves. International currency holdings โ such as deposits abroad and investments in foreign securities โ constituted 95 percent of the total, amounting to SAR1.66 trillion, up 6 percent during this period.
SDRs and the IMF reserve position
SDRs made up 4 percent of the total at SAR77.68 billion, increasing by 0.3 percent. SDRs are an IMF-created supplementary foreign exchange reserve asset, valued based on a basket of major currencies. They provide additional liquidity, stabilize exchange rates, and facilitate international trade and financial stability.
The IMF reserve position, which represents the amount a country can draw from the IMF without conditions, totaled SAR12.72 billion, down 14 percent during this period.
Fitchโs affirmation of Saudi Arabiaโs credit rating
In March, Fitch Ratings affirmed Saudi Arabiaโs long-term foreign-currency issuer default rating at โA+โ with a stable outlook. The agency cited the Kingdomโs robust fiscal and external balance sheets, as well as improvements in governance driven by social and economic reforms.
Projected decline in reserves
Fitch expects Saudi Arabiaโs reserves to decrease to an average of $420 billion by 2024-2025, due to a narrowing current account surplus, offset by investments from entities like the Public Investment Fund. However, sovereign net foreign assets are projected to remain above 50 percent of GDP during this period, well above the โAโ median of 6 percent.
IMFโs praise for Saudi Arabiaโs economic transformation
The IMF recently praised Saudi Arabiaโs โunprecedented economic transformation,โ attributing its success to prudent policies and effective diversification efforts. The IMF projects the Kingdomโs GDP growth to accelerate to around 4.5 percent by 2025, with non-oil growth reaching 3.5 percent in 2024 before further increasing.
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