• 50.5 billion riyals purchases by local banks of government bonds in a year


    *Ikrami Abdullah from Riyadh


    The investments of Saudi banks in government and semi-government bonds recorded a record level at the end of last year at 304.9 billion riyals.

     It is noteworthy that internationally issued government bonds and instruments are purchased by banks from the secondary market.

    According to an analysis conducted by the reports unit in the newspaper "AlEqtisadiah" that based on the data of the Saudi Arabian Monetary Agency (SAMA), the purchases of Saudi banks from government bonds were amounted to about 218.8 billion riyals since the end of 2015 by 254 per cent, which was 82.6 billion riyals by the end of December 2015.


    The direction of Saudi banks in buying heavy government bonds reflects their confidence in the local economy and the ability of the Government to meet their obligations on time.

    During 2018, the Saudi banks' balance of government bonds rose by 20 percent, equivalent to 50.5 billion riyals, to reach 304.9 billion riyals by the end of December, compared to 254.4 billion riyals at the end of December 2017.

    Saudi banks had the highest annual purchases in 2016 at SAR92.3 billion, followed by 2017 purchases worth 76 billion riyals.

    While in 2018, it is the third highest historically.


    On a monthly basis, Saudi banks' balance of government bonds rose by 0.6 percent in December 2018, equivalent to about 1.76 billion riyals, where it was 303.2 billion riyals by the end of November.

    The Saudi government has resorted to issuing international and domestic bonds and instruments by the end of 2015 in an effort to finance the deficit caused by the decline in oil prices compared to mid-2014 levels.


    The public debt of Saudi Arabia by the end of 2018 rise less than the last three years, where it reached 560 billion riyals (149 billion dollars) with an increase of 26.3 per cent compared to 2017.

    While the growth rate of public debt during 2017 was about 40.1 per cent and 122.6 per cent for 2016.


    By the end of 2018, public debt represented 19.1 per cent of GDP, compared to the public debt at the end of 2017 of 443 billion riyals (About $ 118.1 billion), which accounted for 17.2 percent of the output.

    The Ministry of Finance continued to diversify its funding policy for the deficit between debt issuance and withdrawal from government deposits as well as the Kingdom's general reserve to finance the budget deficit for 2018.

    The volume of debt issues during the year 2018 was about 120 billion riyals, including about 48.7 billion SR domestic instruments and 71.3 billion riyals between sukuk and foreign bonds.

    The share of domestic issues is about 40.6 per cent and about 59.4 per cent in foreign issues.


    * Economic Reports Unit

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