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Saudi reserves see rare fall in Aug

JEDDAH — Saudi Arabia's official reserves, excluding gold, declined and net foreign assets held by the Saudi Arabian Monetary Agency (SAMA,) its central bank, showed a rare drop in August.

According to SAMA data, its net foreign assets were SR930 billion ($248b) in August, down 1.2 per cent from July, their first monthly drop in at least a year.

"It was expected, it's nothing unusual," said John Sfakianakis, chief economist at SABB, HSBC's subsidiary in the Kingdom.

"It could mean that instead of strengthening SAMA"s foreign asset position, some of the money might have been repatriated," he said.

Saudi Arabia is selling oil at a high price and they are getting excellent receipts for that, and that money might have not been placed in the central bank's net foreign assets.

According to Khan Zahid, chief economist for Riyad Bank, the drop in net foreign assets might have nothing to do with oil receipts. "If anything they would have gone up since oil prices are hitting record levels," he added.

One analyst, who did not want to be identified, said that the dollar's fall and the subprime crisis in the United States contributed to the decline in SAMA' assets.