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The Kingdom of Saudi Arabia’s foreign exchange reserves stood at around 1.67 trillion riyals at the end of last June, which is enough to cover its imports for a period of 3 years, while imports from the same months amounted to approximately 46 billion riyals.
According to an analysis published by the Saudi Economic newspaper, which relied on data from the Saudi central bank “SAMA” and other official data for the month of last June, the coverage rate of Saudi foreign reserves for imports is 6.1 times the overall rate. average, which is only six months, and the rate in Saudi Arabia is 505% above the world average.
This data reflects Saudi Arabia’s great ability to locally provide required supplies when needed, in light of the Corona virus outbreak and the impact of liquidity in countries around the world.
This huge stock of foreign currency gives the Saudi economy great strength to support exchange rate policy and economic activities.
These reserves make it possible to finance part of the budget deficit resulting from the fall in oil prices, to pay debts and provide imports of goods in exceptional circumstances, and the national economy has been able to absorb economic shocks in general, which ‘they are local or global.
The reserve assets of the Saudi Central Bank “SAMA” include gold, special drawing rights, reserves with the International Monetary Fund, foreign exchange and deposits abroad, in addition to investments in securities abroad. foreigner.
The foreign exchange reserve coverage rate for imports stabilized during the month of June at the same levels as in the previous May, which made it possible to reach the same levels of coverage.
The stability of the foreign exchange reserve coverage ratio for imports in June, compared to May, results from the increase in the value of imports and foreign exchange reserves at about the same rate.
Imports rose 2.5% last June, equivalent to 1.1 billion riyals, compared to the previous May, which stood at 44.9 billion riyals.
Foreign exchange reserves rose 2% last June to 32.9 billion riyals, compared to the previous May by 1.64 trillion riyals.
The importance of foreign exchange reserves
The foreign reserve is of great importance to countries, and it is a major measure of the country’s ability to cover imports, and one of the advantages of foreign reserves is to increase confidence in the monetary policy of the country. country that holds the reserves, and also supports confidence in the exchange rate of the national currency of the country.
At the level of the policies of the central bank of the country which holds the reserves, it can intervene effectively in the foreign exchange market and resist any external pressure on its currency, which contributes to the stability of the exchange rate of the national currency, and creates a stable and attractive economic climate for foreign investment, especially in the case of countries which adopt a flexible and non-fixed exchange rate.
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