Saudi Arabia: Saudi Arabia’s reserves at the Kingdom’s central bank saw a 2.8 percent year-on-year rise to SR1.69 trillion ($450.31 billion) in November.

These assets include monetary gold, foreign accounts, and special drawing rights — the International Monetary Fund’s reserve position.

The latter category comprises currency and deposits abroad as well as investments in foreign securities and accounted for 94.6 percent of the total, reaching SR1.6 trillion — an annual rise of 3.12 percent.

Special drawing rights declined to SR77.5 billion, a slight decrease of 0.8 percent, accounting for 4.6 percent of Saudi Arabia’s total reserves.

Created by the IMF to supplement member countries’ official reserves, SDRs derive their value from a basket of major currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound sterling. 

SDRs can be exchanged among governments for freely usable currencies when needed. 

In addition to providing supplementary liquidity, SDRs help stabilize exchange rates, act as a unit of account, and facilitate international trade and financial stability.

The IMF reserve position totaled around SR12.25 billion but recorded an 11.3 percent decline during this period. This category represents the amount a country can draw from the IMF without conditions.

Gold reserves remained steady at SR1.62 billion, a level unchanged since February 2008.

In November, Saudi oil giant Aramco paid $31.1 billion in dividends for the quarter, significantly boosting the country’s reserves.

The Kingdom’s government, which directly holds nearly 81.5 percent of Aramco, receives the majority of these dividends, effectively funneling substantial financial inflows into state coffers.

Investing in foreign assets is a key strategy for SAMA to bolster the nation’s monetary stability and enhance its economic resilience.

Through a diversified portfolio of foreign securities and currency deposits abroad, SAMA ensures liquidity to meet external payment obligations, supports the Saudi riyal’s exchange rate stability, and creates a buffer against global economic fluctuations.

Historically, foreign currency and deposits abroad formed the bulk of Saudi Arabia’s foreign reserves, primarily driven by oil exports. However, since 2004, a shift has been noted in the composition of these reserves.

Data from SAMA shows that investment in foreign securities began to exceed international currency and deposits, rising from a 50.5 percent share in 2004 to 81 percent by June 2007, and standing at 59.75 percent in November.

This shift reflects the Kingdom’s growing focus on diversifying its reserve assets and optimizing foreign reserve management.

To further support oil prices and secure stable oil revenues, Saudi Arabia has played a crucial role in the OPEC+ alliance. Since 2017, the Kingdom has actively participated in oil output cuts to balance global supply and demand.

This strategy, which has kept Saudi Arabia’s production around 9 million barrels per day in recent years, is aimed at supporting oil prices, stabilizing the Kingdom’s oil revenue, and strengthening the global oil market.

Saudi Arabia has been gradually shifting its investment strategy, moving away from holding the majority of its foreign assets within the central bank.

Instead, the focus has been on building substantial sovereign wealth bodies, such as the Public Investment Fund and the National Development Fund, which together manage hundreds of billions of dollars.

This shift aligns with the Kingdom’s broader objective to diversify its reserves and strategically invest in both domestic and international assets.

A key component of this transformation is the Fiscal Sustainability Program, which aims to decouple public spending from fluctuating oil revenues, avoiding the pro-cyclical spending patterns seen in past oil booms.