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Saudi foreign reserves cover imports for 4 years, 16 times world average

A man counts Saudi Riyal banknotes in a jewellery store in Riyadh, Saudi Arabia, in this October 18, 2017 photo. (REUTERS)
RIYADH: Saudi Arabia’s foreign reserves are sufficient to cover imports for about four years (48 months), according to August data, an analysis published on Sunday by Al-Eqtisadiah newspaper revealed.

According to the analysis conducted by the economic reports unit at the newspaper, based on SAMA data, the rate of coverage of Saudi foreign reserves for imports is 16 times the global average of only three months, meaning that the rate in Saudi Arabia exceeds the world average by 1,500 percent.

Given this huge stock of foreign exchange, the Saudi economy has great strength to support its exchange rate policy and economic activities.

These reserves also help finance part of the budget deficit resulting from falling oil prices, debt repayment and provision of imports of goods in exceptional circumstances.

These reserves also help the national economy absorb economic shocks in general, whether local or global.

SAMA’s reserve assets include gold, special drawing rights, IMF reserves, foreign exchange and deposits abroad, as well as investments in securities abroad.

Saudi Arabia’s reserves abroad amounted to SAR 1.83 trillion at the end of August, while imports during the same month amounted to about SAR38.1 billion.

The rate of coverage of foreign reserves of imports in August rose from the levels of the month of July, which was about 3.6 years (43 months), exceeding the global average by 1,331 percent.

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