21-month slump in deposits, reserves

Updated 02 March 2015
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21-month slump in deposits, reserves

The government’s reserves and deposits with the Saudi Arabian Monetary Agency (SAMA) dropped at the end of January to SR1.39 trillion, the lowest level in 21 months.

This was a 2 percent change on a monthly basis compared to December, and 8 percent change on an annual basis compared to January last year.


“The reserves and deposits of the government is part of the liabilities in SAMA’s financial statements, which amounts to SR2.79 trillion, equal to its assets,” Al-Eqtisadiah reported.


The assets include investments in security bonds, deposits with banks abroad, cash, foreign exchange, gold, and other assets. “The government reserves and deposits are divided into three categories, the general reserve of the government, allocations for government projects and government’s current account.”


Commenting on the fall in reserves and deposits, John Sfakianakis, Middle East director at Ashmore Group, told Arab News: “This should be seen as perfectly normal as reserves are to be used in an environment of low oil revenues.”
He also said: “Definitely reserves both on a total as well as related to government related reserves are falling. This is to be expected given the low oil revenues and government spending that can be filled by deploying reserve assets. The economy depends on government spending which can only remain high if reserves are used or debt is deployed.”
The general reserve of the government accounts for 60 percent of the total government reserves and deposits, allocations for government projects is 32 percent and government’s current account 8 percent.

The 8 percent fall in the general reserve, accounting for SR74.8 billion in January compared to December, was a major factor in the decline of the level of reserves and deposits.


Allocations for government projects dropped SR15.9 billion, a 3 percent fall during the same period, and totaled SR439.2 billion in January.



In terms of annual performance, the government’s current account is the biggest loser and a major influencing factor in the decline of its reserves and deposits at SAMA. Its decline was about SR55.7 billion equivalent to 32 percent at the end of January of the current year, to reach SR116.9 billion, compared to SR172.5 billion in the same period last year.


“The allocations for government projects registered an 8 percent fall or SR36 billion from its level at the end of January last year, to reached SR475.2 billion. The general state reserve declined by 3 percent or SR21.8 billion from its level at the end of January last year, to reach SR851.6 billion.”


Kobe Steel posts first profit in three years despite data fraud scandal

Updated 27 April 2018
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Kobe Steel posts first profit in three years despite data fraud scandal

TOKYO: Kobe Steel, Japan’s third-biggest steelmaker, on Friday posted its first annual profit in three years, even after admitting to falsifying quality data, a scandal that affected hundreds of customers and hit Japan’s manufacturing prowess.
Kobe Steel reported profit of ¥63.19 billion for the year ended March 31, against a loss of ¥23.05 billion a year earlier.
The result was above its own forecast of ¥45 billion and an estimate of ¥49.56 billion among seven analysts surveyed by Thomson Reuters.
The company predicted a ¥45 billion profit for the year to March 2019, compared with a mean profit forecast of ¥44.62 billion from six analysts.
Kobe Steel, which supplies steel and aluminum parts to manufacturers of cars, planes and trains around the world, admitted to supplying products with falsified specifications to more than 600 customers and admitted the data fraud has been going on for nearly five decades.