Saudi foreign reserves are on course to fall below $500bn by the end of 2016. Latest numbers from the Saudi Arabian Monetary Agency (SAMA) show its net foreign assets falling to $593bn at the end of February, down $19bn on the end-2015 figure and $121bn (17%) on the year-ago level. If reserves continue to fall at the January/February rate they will be just $496bn by the end of 2016, and, in theory, hit zero in early 2021. In practise this is highly unlikely. Oil prices have rebounded somewhat from January’s lows (see p2), while the kingdom is moving to trim spending.
In the latest move Riyadh last month ordered ministries to cut spending on contracts by at least 5%. Instructions were sent by the Minister of Economy and Planning to “all ministries and state bodies to reduce the value of outstanding contracts signed to support their operations, as well as construction contracts included in the 2016 state budget by not less than 5% of the remaining obligations,” according to a Reuters report. The instructions forbid ministries from signing contracts without Finance Ministry approval. (CONTINUED - 316 WORDS)