Wall Street Bows to Saudi Financial Empire

Saudi Arabia increases its reserves in US Treasury bonds, with more than a third of foreign assets now invested

Saudi Arabia’s reserves of US Treasuries, as part of foreign assets held by its central bank, rose in October to the highest level in four years. According to data compiled by Bloomberg, US Treasury Bonds accounted for nearly 35% of total foreign assets held by SAMA, the Saudi Central Bank, last month. This puts this participation at the highest level since February 2020, when the coronavirus pandemic began.

The country’s investments in US government bonds have been rising this year, and SAMA now holds $144 billion in US Treasury Bonds despite the decline in its total foreign assets, which have reached their lowest level since February.

While the most recent increase came ahead of the US elections in November, a greater volume of US government bonds in Saudi Arabia’s hands could help strengthen the kingdom’s relationship with President Donald Trump’s administration.

Saudi Arabia’s de facto ruler, Crown Prince Mohammed Bin Salman, had a close relationship with Trump during the American president’s first term, something that is expected to continue when the billionaire returns to the White House.

In a sign of how Saudi Arabia is already positioning itself to cozy up to the new US administration, Yasir Al Rumayyan, head of Saudi Arabia’s sovereign wealth fund and a close ally of Prince Mohammed, sat alongside the president-elect in a fight for UFC in New York earlier this month.

SAMA declined to comment on Bloomberg’s request.

In February 2020, SAMA’s US Treasury Bonds represented more than 37% of foreign assets, before falling rapidly as the Saudi government used its reserves to finance a $40 billion transfer to its fund sovereign, in order to buy shares that had been affected by investor panic over the impact of the coronavirus pandemic.

Saudi Arabia’s foreign assets fell from nearly $500 billion at the start of 2020 to about $411 billion at the end of October, partly due to the transfer to the PIF, but also due to the use of reserves to finance government spending. government.

With information from Bloomberg*