Net foreign assets at Saudi Arabia’s central bank dropped 4.7 per cent from a year earlier in March to SAR2.590 trillion ($690.6 billion), their lowest level since July 2013, central bank data showed on Wednesday.
The central bank acts as the country’s sovereign wealth fund, storing its huge earnings from oil exports. Although the reserves’ drop is partly due to the strong U.S. dollar, which has cut the value of the portion denominated in non-dollar currencies, the steep fall suggests Saudi Arabia is running down its assets to cover a budget deficit due to low oil prices.
Net foreign assets fell by $16 billion in March from the previous month. In February, they dropped by $20.2 billion month-on-month. They peaked at a record $737 billion last August.