Saudi Arabia’s net foreign assets rose in May, reversing three months of declines. The stockpile climbed by 0.2%, or about 3 billion riyals ($800 million), to reach $445 billion, according to a monthly report from the Saudi Arabian Monetary Authority on Sunday. Officials have said a record cumulative decline of more than $47 billion in March and April was mainly due to a $40 billion transfer from the central bank to the sovereign wealth fund, intended to support investments abroad to take advantage of market turmoil during the coronavirus pandemic.

Saudi Arabia's net foreign assets rose for first time since January

With reserves at the lowest in almost a decade, the world’s largest oil exporter has tried to rein in spending at home as it faces a double crisis from the outbreak and a major decline in energy revenue. The government, which counted on crude for over 60% of its income this year, is now contending with oil output cuts and prices well below its break-even level. Finance Minister Mohammed Al-Jadaan has said the government would only draw down reserves by up to 120 billion riyals over the whole year, as originally planned in the budget.

“Saudi Arabia’s government had planned to withdraw 120 billion riyals from reserves this year, but not much of that has materialized so far. The bulk of that is probably yet to come, and that will lead to further declines in the central bank’s holdings.”

— Ziad Daoud

The recent increase in oil prices has given officials slightly more breathing space, though the output cuts will result in less of a boost to public finances. Global benchmark Brent crude rose nearly 40% in May from April, and has traded at over $40 a barrel this month — still far short of the $76.10 the International Monetary Fund estimates Saudi Arabia needs to balance its budget.