Saudi Arabia tapping reserves to pay for rising imports

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The recent decline in Saudi Arabia’s foreign reserves, a measure of its ability to support its dol-lar-pegged currency, was partly due to a lag be-tween import payments and export receipts, the Saudi central bank governor told Reuters.

Net foreign assets at the central bank, known as SAMA, dropped month ly by roughly $8 billion to $436 billion in April and dropped further in May, recent central bank data showed, declining to about $433 billion, a level comfortably above what Saudi Arabia would need to protect the peg.“

Reductions in reserves over the past couple of months were mainly to finance a rebound in pan-demic-hit import demand, while leads.–AN

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