Saudi banks' purchases of government bonds have accelerated since the end of 2015, rising 331 percent (about 285.9 billion riyals) to 371.1 billion riyals at the end of September 2019, compared to 82.6 billion riyals at the end of December 2015.
According to the analysis of the reports unit in Al-Eqtisadiah newspaper, based on the data of the Saudi Arabian Monetary Agency (SAMA), the investment of banks in government bonds reached a record level by the end of last September, exceeding the level recorded in the previous month (August 2019) of 365.3 billion riyals, an increase of 1.6% and the value of 5.8 billion riyals.
Saudi banks' investment in government bonds rose year-on-year at the end of September, up 25.1 percent (74.5 billion riyals), from 296.6 billion riyals at the end of September 2018.
Since the beginning of the year, "within nine months," the investment of Saudi banks in government bonds, rose 21.7 percent (66.1 billion riyals), from 304.9 billion riyals by the end of 2018.
The trend reflects the heavy Saudi banks to buy government bonds, confidence in the local economy, and the government's ability to meet its obligations in a timely manner.
During 2018, Saudi banks' balance of government bonds rose 20 percent, or 50.5 billion riyals, to 304.9 billion riyals at the end of 2018, compared with 254.4 billion riyals at the end of 2017.
Saudi banks recorded the highest annual purchases ever in 2016 with 92.9 billion riyals, followed by 2017 with purchases worth 76 billion riyals, in 2018 is the third-highest purchases historically.
The record of public debt to Saudi Arabia by the end of 2018, up a pace less than the past three years, reaching 560 billion riyals, "$ 149 billion", an increase of 26.3 percent compared to 2017.
While the public debt growth rates were recorded during 2017, about 40.1 percent and 122.6 percent in 2016.
Public debt at the end of 2018 accounted for 19.1 percent of GDP, compared with 443 billion riyals ($ 118.1 billion) at the end of 2017, which accounted for 17.2 percent of GDP at the time.
The Ministry of Finance continued to diversify its funding policy for deficits between issuing debt or withdrawing from government deposits as well as the State General Reserve to finance the 2018 budget deficit.
The volume of debt issuance in 2018 amounted to about 120 billion riyals, including about 48.7 billion riyals domestic bonds and 71.3 billion riyals between deeds and foreign bonds.
Thus, the share of domestic issuances is about 40.6 percent, and about 59.4 percent is external.
* Al-Eqitsadiah Reports Unit
