Saudi Arabia’s net foreign reserves dropped by nearly $50bn over the two months to end-April as the kingdom diverted funds to enable its high-profile PIF sovereign wealth fund to snap up assets deemed as under-valued. The logic is sound, and one of the advantages of having maintained substantial reserves is the flexibility to make such moves. Whether all of the investments will ultimately turn out to be successful is of course another matter.
When the Saudi Arabian Monetary Authority (Sama) released its latest monthly report on 31 May, details emerged of a $21bn drop in net foreign assets in April. This came hot on the heels of a $27bn drop in March, which was the biggest monthly drop this century (MEES, 1 May). (CONTINUED - 939 WORDS)