GCC foreign reserves rise to $693bn; Saudi leads – Analysis

GCC foreign reserves rise to $693bn; Saudi leads – Analysis
Saudi Arabia seized the lion’s share of foreign reserves in September 2017

By: Mahmoud Salah El Din and Eman Ghaly

Mubasher: Foreign reserves held with members of the GCC rose by the end of September 2018 from a year ago, with Saudi Arabia registering the highest share of the reserves amongst its peers, statistics conducted by Mubasher using central bank data showed.

Total foreign reserves held with six GCC member states amounted to $693.07 billion by the end of September, a rise of 4.08% year-on-year from $665.88 billion, the data indicated.

 

Saudi Arabia

Saudi Arabia seized the lion’s share of foreign reserves with $507.2 billion, making up 73.2% of the total value of reserves held with all six GCC members. Globally, it ranks fourth.

This came after the kingdom succeeded in raising its foreign reserves by 4.5% or $21.59 billion year-on-year to $507.21 billion in September 2018 from $485.22 billion, statistics by Mubasher showed.

In terms of US treasury holdings, Saudi Arabia continued to increase those holdings for the eighth month in a row, thereby ranking 10th globally in its US treasury holdings.

Saudi Arabia’s investments in US treasuries jumped 28.8% to $176.1 billion by the end of September from $136.7 billion in the same period of 2017.

 

UAE

The UAE ranked second in foreign reserves held by the central bank with $89.81 billion, a decrease of 4.93% from $94.47 billion in September 2017.

The UAE’s reserves make up 13% of all reserves held with the GCC.

In terms of US treasuries, the UAE grew its holdings by 10.5% or $5.7 billion to $60 billion by the end of September 2018 from $54.3 billion a year ago.

Qatar

The Central Bank of Qatar’s (CBQ) reserves in foreign currency increased by 30.5% to $46.47 billion by the end of September, their highest level in two years versus $35.60 billion in the previous year.

Three factors contributed to this growth, namely Qatar hiking its investments in bonds and foreign treasuries by 113.8% to $10.69 billion from $4.99 billion in September 2017, which included a 388.5% surge in US treasury holdings to $1.27 billion from $260 million.

The second reason was the rise in the CBQ’s assets with foreign banks by 48.8% to $14.76 billion from $9.92 billion in September last year, while third factor was the rise in liquid foreign assets, or deposits, by 1.9% to $19.44 billion from $19.08 billion in September 2017.

Kuwait

Meanwhile, data released by the Central Bank of Kuwait (CBK) showed that its net foreign reserves had increased 14.8% to $33.52 billion by the end of the ninth month of the year from $29.21 billion in the year-ago period.

The rise came on the back of higher cash, accounts, bonds, depository receipts, and treasuries held by the CBK, which grew to $34.01 billion from $29.70 billion in September 2017, while the CBK’s gold reserves remained unchanged at $104.27 million.

Recent data by the US Treasury Department showed that Kuwait’s holdings of US treasuries had grown 12.3% to $43.8 billion from $38 billion in September 2017.

 

Bahrain

On the other hand, Bahrain’s foreign currency reserves plunged 56.8% year-on-year to $1.49 billion in September 2018 from $3.45 billion.

The International Monetary Fund (IMF) recently called on the kingdom to carry out a series of reforms to reduce its fiscal deficit on the medium term and maintain a strong financial sector as well as support economic growth.

It is worth noting that Bahrain received $10 billion in aid from neighbours Saudi Arabia, Kuwait, and the UAE to bolster its economic growth and development.

Oman

Recent data by the Central Bank of Oman (CBO) indicated that the country’s foreign reserves had fallen 16.89% year-on-year to $14.57 billion by the end of August 2018 from $17.53 billion. This was due a decline in the government’s investments in securities to $10.38 billion from $12.46 billion by the end of August 2017.

 

Global reserves

China continued to lead in terms of foreign reserves with $3.1 trillion, followed by Japan with $1.26 trillion, while Switzerland ranked third with $800.4 billion, and Saudi Arabia came in at fourth place.

 

Translated by: Nada Adel Sobhi