By Mohammed Abu Meleeh

Riyadh-Mubasher: Saudi Arabia has withdrawn billions of riyals from its investments in overseas stock markets to limit its exposure to stock price volatilities amid political turmoil.

The move is also aimed at financing a portion of the expected budget deficit arising from low oil prices.

The world's largest oil producer also resorts to local banks to finance its potential deficit.   

Saudi Arabian Monetary Agency (SAMA), the kingdom's central bank, has withdrawn SAR 433.9 billion ($115.7 billion) from its investments in overseas securities in one year ended October 2015. The bank withdrew SAR 75.9 billion ($20.2 billion) in October alone, according to SAMA's recent data.

The kingdom's withdrawal from cash reserve reached SAR 354.4 billion ($94.5 billion) in one year. A total of SAR 24.6 billion ($6.6 billion) were withdrawn in October alone.

The cash reserves kept falling for the ninth straight month in October, reaching SAR 2.43 trillion ($647.9 billion), the lowest since November 2012.

SAMA resorted to local banks to finance a portion of the expected budget deficit and ease the sequential decline in reserves, especially as the Saudi banks are sitting on piles of cash.

The local banks' liabilities from public sector reached SAR 110.6 billion ($29.5 billion), their highest since July 2009.

The government bonds dominated 64.7% or SAR 71.5 billion ($19.1 billion) from the public sector's liabilities, the largest since December 2009.

The kingdom's oil revenues are expected to decline SAR 548.49 billion ($146.3 billion) this year as the value of oil production is likely to fall by 42.46% year-on-year from SAR 1291.9  billion ($345 billion) to SAR 743.42 billion ($198 billion), according to a recent report by Mubasher.

Translated by Abdul Maguid Aboshahla