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Saudi holdings of US Treasuries drop to four-year low in October

Saudi holdings of US Treasuries drop to four-year low in October

Saudi holdings of US Treasuries drop to four-year low in October

Image: Arab News

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RIYADH: Saudi Arabia’s holdings of US Treasuries fell to the lowest level in about four years in October, Arab News reported.

The kingdom’s stocks of US government debt fell by $8 billion, the most in a year, to $116.5 billion, the lowest level in four years, according to US Treasury Department data.

Saudi Arabia was the biggest seller after Norway, which sold $16 billion in October, the latest month for which figures are available.

Saudi Arabia last made a big sell-off of US debt in March and April last year, dumping nearly $60 billion of Treasuries in total.

Countries like Saudi Arabia build part of their reserves by buying US holdings as they can be liquidated very fast. The Kingdom and other oil exporters increased their holdings over the past few years when crude prices were on the rise.

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Saudi Arabia has been liquidating some Treasury holdings in recent years to invest in projects aimed at diversifying its economy away from oil.

The total value of US Treasury securities held by Saudi residents edged up 0.2 per cent to $124.3 billion in September, but the holdings have been on a downward trajectory since November 2020 when they stood at $137.6 billion.

During the first 10 months of 2021, the kingdom has decreased its investments in the US debt instruments by about 15 per cent, compared with the end of 2020.

The kingdom is the 17th largest holder of US debt while the UAE ranks 23rd with $53 billion and Kuwait 29th with $46 billion.

Globally, Japan is the biggest holder of US Treasury bonds with $1.32 trillion, compared with $1.299 trillion in September; followed by China with $1.065 trillion and the UK with $579.8 billion.

The US Treasury only began publishing the details of Saudi Arabia and other oil producers’ Treasury holdings in May 2016. At that time, Saudi Arabia held $116.8 billion, only marginally more than it does today, but up from $102.8 billion in March 2015. China had a portfolio of $1.24 trillion, then the world’s largest holdings, but has since been overtaken by Japan.

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