JEDDAH: Net foreign assets at Saudi Arabian Monetary Agency fell to SR2.521 trillion ($672.2 billion) in May, down by $6.6 billion or 1.0 percent from the previous month as the kingdom continued to draw down reserves to cover a budget gap caused by cheap oil.

Assets dropped by 8.1 percent from a year earlier to their lowest level since April 2013, central bank data showed.

The central bank serves as the country’s sovereign wealth fund, storing its earnings from oil exports. Assets’ year-on-year drop is partly due to the strong US dollar, which has cut the value of the portion denominated in non-dollar currencies, but a major part is due to a fiscal drawdown, analysts say.

Assets fell by $11.8 billion in April from the previous month, by $16.0 billion in March and by $20.2 billion in February. They peaked at a record $737 billion last August.

Although the pace of decline has been slowing, this may be temporary as the Saudi government will need to find more money in coming months.

The International Monetary Fund predicts that if oil prices stay in their recent range — Brent crude is now around $62 a barrel — the government will run a fiscal deficit of around 20 percent of gross domestic product this year, equivalent to roughly $150 billion.

Saudi officials have said they may start issuing local currency debt to cover part of the deficit, and the IMF believes this could begin before the end of the year.

The assets are held mainly in the form of deposits with banks abroad, which totalled $96.8 billion at the end of May, and foreign securities such as US Treasury bonds, which totalled $515.8 billion. The vast majority of the assets are believed to be in US dollars.

The SAMA data shows Saudi Arabia has mainly been running down its bank accounts rather than selling securities.

Deposits fell 22 percent between August and May, while securities holdings were just 7 percent lower.