Saudi Arabia reduces 36.7% of its holdings of US treasury securities in two years

April 19, 2022

Okaz/Saudi Gazette

RIYADH — Saudi Arabia reduced its holdings of US treasury securities by around 36.71 percent within two years. The Kingdom reduced the value of securities, amounting to SR253.88 billion ($67.7 billion) during the period between February 2020 until February 2022, according to a monitoring of Okaz/Saudi Gazette.

There has been a decrease in the holding of US treasury securities by the Kingdom reaching $116.7 billion in February this year, and this figure marks a decrease of $2.7 billion compared to the previous month.

Saudi Arabia dropped to the 18th place among the largest holders of US securities in February, after it was ranked 17th at the end of 2021 and during January 2022.

Saudi Arabia’s investments in the US treasury securities last February amounted to $101.27 billion in long-term securities representing 87 percent of the total, and $15.46 billion in short-term securities representing 13 percent.

According to the Federal Reserve and US Department of the Treasury, foreign countries held a total of $7.55 trillion in US treasury securities as of September 2021. Of the total 7.55 trillion held by foreign countries, Japan and Mainland China held the greatest portions.

In February 2022, Japan topped with a value of $1306.3 billion, followed by China, with a value of $1054.8 billion. Over the course of two years, Japan increased its ownership of securities by only three percent, up by $38 billion.

As for China, which is the second in the world in holding securities, its holdings of securities fell by 3.43 percent, a decrease of $37.5 billion.

Economic analyst Dr. Salem Bajaja stressed that buying and selling US treasury securities and other investment means are usually subject to periodic evaluation. Similar is the case with their feasibility compared to other types of investments, in addition to the need for some countries to monetize their investments when needed.

During the coronavirus pandemic period, many countries resorted to reducing their holdings of securities, Bajaja said while citing the examples of Brazil, Ireland, Luxembourg, and Hong Kong.

April 19, 2022
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