* Ikrami Abdullah from Riyadh
Official data showed that Saudi Arabia's foreign reserves were sufficient to cover its imports for about four years (45 months).
According to the analysis of the economic reports unit in the newspaper "Al-Eqtisadiah", based on the data of the Saudi Arabian Monetary Agency "SAMA" and the General Authority for Statistics-to the end of April-the rate of coverage of Saudi foreign reserves for imports is seven times the global average of only six months. It is meaning that the average in Saudi Arabia exceeds the world average by 642 percent.
Given this huge stock of foreign exchange, the Saudi economy has great strength to support exchange rate policy and economic activities.
These reserves also help to finance part of the budget deficit that was resulting from the decline in oil prices, debt repayment and imports of goods in exceptional circumstances.
The national economy can also absorb economic shocks in general, whether local or global.
SAMA's reserve assets include gold, SDRs, IMF reserves, foreign exchange and deposits abroad, as well as investments in securities abroad.
Saudi Arabia's reserves abroad were amounted to about 1.9 trillion riyals by the end of April, while imports in the same month were amounted to about 42.7 billion riyals.
Saudi Arabia's foreign reserves are enough to cover imports for 3.7 years (45 months).
The rate of coverage of foreign reserves of imports in April fell from the levels in March, which was about 3.8 years (46 months), and was more than the world average of 666 percent. The decrease in foreign import reserve coverage in April compared to March of the same year was due to higher imports than foreign reserves.
Imports in April 2018 rose by 6 per cent, amounting to 2.4 billion riyals, compared to 40.2 billion riyals in March of the same year.
Foreign reserves rose 2.7 percent to SR49.4 billion in April 2018 compared to March's 1.85 trillion riyals.
The rate of coverage of foreign reserves of Saudi imports since the beginning of last year 2017 is as follows: "3.7 years (45 months) in January, 4.4 years (53 months) in February, 4.1 years (49 months) In March."
The rate of coverage of foreign reserves for imports of the same year was 3.7 years (44 months) in April, 3.6 years (43 months) in May, 4.8 years (57 months) in June, 3.6 years (43 months) in July, and four years (48 months) in August.
The rate of coverage of foreign reserves for imports was 4.8 years (58 months) in September 2017, 3.5 years (42 months) in October of the same year, four years (48 months) in November of last year, and 3.9 years (47 months) in December 2017.
In 2018, the average was 3.71 years (45 months) in January, 3.66 years (44 months) in February, 3.8 years (46 months) in March, and 3.7 Year (45 months) in April.
The importance of foreign-exchange reserves
Foreign reserve is of great importance to countries as it is a major measure of the ability of the state to cover imports.
One of the benefits of the foreign reserve is to increase confidence in the monetary policy of the reserve country, and to bolster confidence in the exchange rate of the nation's national currency.
In terms of the policies of the central bank of reserves, it can intervene efficiently in the exchange market and resist any external pressure on its currency.
This contributes to the stability of the exchange rate of the national currency, to a stable economic environment and attractive foreign investment, especially in the case of countries that adopt a flexible, not fixed, exchange rate.
* Economic Reports Unit
