Saudi Arabia’s foreign currency reserves plummeted by more than $16 billion last month after slashing oil output, the biggest drop since crude prices were negative during the coronavirus pandemic.
The kingdom’s net foreign assets declined to 1.53 trillion riyals ($407 billion), according to the central bank’s monthly report published on Monday. It is the lowest amount since 2009, Bloomberg reported.
The steep decline in reserves comes after Saudi Arabia said earlier this month it would extend its voluntary oil output cut of 1 million barrels per day for another month to include September, adding its extension could continue beyond that. Saudi Arabia said the move was to stabilize oil markets, with the kingdom being the largest producer in the OPEC+, of which several members started implementing cuts in May. The kingdom will produce around 9 million barrels per day (bpd) in September.
Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC, told Bloomberg that Saudi Arabia's net foreign asset should improve in September, especially when the first performance-linked dividend distribution arrives from Aramco.
