Saudi banks’ purchases of government and quasi-government sukuk and bonds have accelerated since the end of 2015, rising by 398 percent, equivalent to about “343.1 billion riyals”, to 429.3 billion riyals at the end of last August, compared to about 82.6 billion riyals at the end of December 2015.
According to the monitoring unit of the reports in Al-Eqtisadiah newspaper, based on the data of the Saudi Arabian Monetary Agency (SAMA), the banks ’investments in government bonds and bonds recorded the first monthly decline last August, the first since March 2017 (that is, within 41 months). Last June, its balance was 433.25 billion riyals.
Saudi banks ’investments in government bonds and sukuk rose on an annual basis at the end of last August 19.7 percent, equivalent to“ 70.8 billion riyals ”, where it was 358.5 billion riyals at the end of the same month of 2019.
Since the beginning of the year “within eight months”, Saudi banks’ investments in government bonds and bonds increased by 11.9 percent, equivalent to “45.6 billion riyals.”
Saudi banks’ investments in government and semi-government sukuk and bonds recorded a record level at the end of last year 2019, at 383.7 billion riyals.
The balance of Saudi banks of sukuk and government bonds increased during 2019 by 25.8 percent, equivalent to 78.5 billion riyals, after it was 305.2 billion riyals by the end of 2018.
Bank purchases during 2019 are the highest in three years, and the second highest bank purchases of government bonds and sukuk at all after 2016, during which purchases amounted to 92.3 billion riyals, while 2017 is the third highest purchase historically with a value of 76 billion riyals.
International bonds and government sukuk are bought by banks on the secondary market. The tendency of Saudi banks to buy heavily in government sukuk and bonds reflects their confidence in the local economy and the government’s ability to fulfill its obligations on time.
The Saudi government has resorted to issuing international and local bonds and sukuk since the end of 2015, in an attempt to finance the deficit resulting from the decline in oil prices compared to mid-2014 levels.
The volume of Saudi public debt for the year 2019 was about 678 billion riyals, which constitutes about 24 percent of GDP for the same year.
Economic Reports Unit
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