The Saudi government’s foreign exchange reserves with the Saudi Arabian Monetary Agency (SAMA) are slowly shrinking, as the government maintains a high level of spending, despite the plunge in oil prices in the first four months of 2015.

This high state spending continues despite a warning by the IMF to the Gulf states to cut spending on wages and subsidies in order to prevent the draining of state reserves. But some of these countries like Saudi Arabia, Kuwait and the UAE have substantial fiscal buffers, which can see them through some time if oil prices remain at their present low levels in the mid-term. (CONTINUED - 362 WORDS)