Saudi Arabia Foreign Exchange Reserves -- June 28, 2020

Updates

July 4, 2020: see the actual data at this link.

Original Post

Note: The numbers on this post, from various sites/sources, seem to be "off" -- not in agreement. Consider this a "draft" -- a first look. We will see the tracking graphic I use at Trading Economics later this week. There even seems to be a discrepancy in the report regarding the loan: was it $40 billion or was it $10 billion? I thought it was $40 billion. But in the Bloomberg story they are talking about a $10 billion syndicated loan, so we may be talking apples and oranges, or perhaps figs and kumquats.

Last month I asked my son-in-law how a $40-billion loan affects a country's foreign exchange reserves -- in double-entry bookkeeping -- whether it's a liability or an asset. He did not know. It appears the headline writers consider it an asset.

From Bloomberg today:

Saudi Arabia's foreign-currency reserves rose modestly in May for the first time in 16 months, probably due to a $10 billion syndicated loan concluded in the previous month.

The central bank's net foreign assets climbed 0.1 percent to 2.148 trillion riyals ($573 billion), the the first gain since January 2015, according to official data released on Tuesday (June 23 or June 30, 2020?).

Foreign currencies and deposits abroad rose to 744.7 billion riyals from 693 billioni riyals in April, while investment in foreign securities dropped.

The Bloomberg link is behind a paywall; the story is also at FP.  The lede is very different but both are Bloomberg stories.

Saudi Arabia’s net foreign assets rose in May, reversing three months of declines.
The stockpile climbed by about 3 billion riyals ($800 million) to reach $445 billion, according to a monthly report from the Saudi Arabian Monetary Authority on Sunday.

Officials have said a cumulative decline of more than $47 billion in March and April was mainly due to a $40 billion transfer from the central bank to the sovereign wealth fund, intended to support investments abroad to take advantage of market turmoil during the coronavirus pandemic.

With reserves at the lowest in almost a decade, the world’s largest oil exporter has tried to rein in spending at home as it faces a double crisis from the outbreak and a major decline in energy revenue. The government, which counted on crude for over 60% of its income this year, is now contending with oil output cuts and prices well below its break-even level.

We will see the "official" graphic later this week. Link here.

But getting back to the story: the narrative said reserves rose modestly whereas the number actually posted was 0.1% (?). If that's accurate, is a 0.1% increase a "modest" increase? Wow, I would call that a rounding error.

On another note, obviously the chart I'm following at the link above and the data being presented by Bloomberg is different. The chart I follow shows any number of monthly gains (and losses) since January, 2015.

I am eagerly awaiting the new graph at the link that I track.

The most recent data, April, 2020, reports 1682371 SAR million (link here).

But yes, the two data points are different.

The Bloomberg story: 2.148 trillion riyals, $573 billion (May)
The FP (Bloomberg) story:  1.668 trillion riyals,  $445 billion (May)
The Trading Economics link: 1.682 trillion riyals, $454 billion (April)

So, we'll see later this week.

Official rate of exchange: 1 Saudi Riyal = 0.27 US dollar.

Yemen: on another note -- it was recently announced that Saudi Arabia has suspended its foreign aid to Yemen. Link here.