The Governor of the Saudi Central Bank, Fahad Almubarak, explained that "the recent decline in foreign exchange reserves is due to reasons including the time gap between import payments and export income."
Almubarak stated that "the recovery of import activities, which recorded a low level in May 2020, preceded a recovery in the value of exports. These changes are expected in light of the exceptional economic repercussions over the past 18 months, with the return of economic conditions to get closer to normal."
He also emphasized that “the decline in reserves during the past two months is mainly due to financing the recovery in demand for imports that were affected by the pandemic, while the progress or delay of oil income (from taxes and distributions) leads to some fluctuation in the level of central bank reserves.”
The central bank’s net foreign assets fell by eight billion dollars from a month ago to 436 billion dollars in April, recording the lowest level in more than ten years, and then returned to decline in May, according to the latest central bank data, to about 433 Billion dollars. The decline seemed surprising in light of the recovery in oil prices, and it is linked to transfers to the sovereign wealth fund, the Public Investment Fund, which last year received $40 billion in reserves to finance investments.
Source (CNBC Arabic Website, Edited)
