The foreign reserves of the Kingdom of Saudi Arabia abroad amounted to about 1.67 trillion riyals at the end of last June, which is enough to cover its imports for a period of 3 years, while imports in the same month amounted to about 46 billion riyals.
According to an analysis published by the Saudi Economic newspaper, which was based on data from the Saudi Central Bank “SAMA” and other official data for the month of last June, the rate of coverage of Saudi foreign reserves for imports is 6.1 times the global average, which is only six months, and the rate in Saudi Arabia exceeds the global average by 505 percent. .
These data reflect Saudi Arabia’s great ability to provide the required supplies locally in case they are needed, in light of the outbreak of the Corona virus and the impact of the liquidity of countries around the world.
This huge stock of foreign exchange gives the Saudi economy a great strength to support the exchange rate policy and economic activities.
These reserves help finance part of the budget deficit resulting from the decline in oil prices, pay debts and provide imports of goods in exceptional circumstances, and the national economy has been able to absorb economic shocks in general, whether local or global.
The reserve assets of the Saudi Central Bank “SAMA” include gold, special drawing rights, reserves with the International Monetary Fund, foreign exchange and deposits abroad, in addition to investments in securities abroad.
The rate of coverage of foreign reserves for imports stabilized during last June at the same levels in the previous May, which achieved the same levels of coverage.
The stability of the rate of coverage of foreign reserves for imports in June, compared to May, came as a result of the increase in the value of imports and foreign reserves at almost the same pace.
Imports rose last June by 2.5 percent, equivalent to 1.1 billion riyals, compared to the previous May, which amounted to 44.9 billion riyals.
Foreign reserves rose last June by 2 percent, equivalent to 32.9 billion riyals, compared to the previous May, which amounted to 1.64 trillion riyals.
The importance of foreign reserves
The foreign reserve is of great importance to countries, and it is a major measure of the country’s ability to cover imports, and one of the benefits of foreign reserves is to increase confidence in the monetary policy of the country that holds the reserves, and also supports confidence in the exchange rate of the country’s national currency.
In terms of the policies of the central bank of the country that holds the reserves, it can intervene efficiently in the exchange market and resist any external pressures on its currency, which contributes to the stability of the exchange rate of the national currency, and creates a stable and attractive economic climate for foreign investments, especially in the case of countries that adopt a flexible exchange rate. and not fixed.
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