Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Saudi Arabia's PIF gets $40 billion from foreign reserves to fund overseas investments

share with twitter share with LinkedIn share with facebook
05/29/2020 | 05:57pm EDT
FILE PHOTO: 2020 World Economic Forum in Davos

By Marwa Rashad

Saudi Arabia transferred a total of 150 billion riyals ($40 billion) from central bank foreign reserves to fund investments by sovereign wealth fund PIF in March and April, the finance minister said on Friday.

Saudi Arabia's central bank foreign reserves fell in March by nearly $27 billion (22 billion pounds) month-on-month, their fastest rate in at least 20 years, to around $464.5 billion, according to Reuters calculations based on central bank data. April figures are not yet available.

Finance Minister Mohammed al-Jadaan said in a statement that the transfers to PIF were done on an "exceptional basis."

The statement did not give a breakdown but a finance ministry official told Reuters that the government transferred $15 billion to the Public Investment Fund in March and another $25 billion in April, saying foreign reserves are expected to drop in April at about the same rate as the previous month.

The official said PIF had also converted into U.S. dollars part of its own riyal-denominated liquidity to back investments. The government did not expect a significant drop in central bank foreign reserves going forward and fluctuations will be in line with previous years, added the official, who asked not to be named because the details are not yet public.

"While foreign exchange flows since the start of the year are on average within historical levels, this measure (transfers to PIF) resulted in a reduction in net foreign reserves assets to support investment plans," Jadaan said in the statement, adding that PIF investments would not be reflected in published central bank data.

"Maximising returns on the kingdom's assets will reflect positively on economic performance and public finances and limit negative effects of the coronavirus pandemic. Returns on PIF investments will be available to support public finances when needed," he said.

In April, the head of PIF, Yasir al-Rumayyan, said it was looking in to investment opportunities in areas such as aviation, oil and gas and entertainment.

The fund, which manages over $300 billion in assets and has stakes in Uber Technologies Inc and electric car company Lucid Motors, had this year accumulated stakes in four major European oil companies and disclosed an 8.2% stake in cruise operator Carnival Corp.

Earlier this month, it also disclosed stakes in Boeing Co, Citigroup Inc, Facebook Inc, Walt Disney Co and Marriott.

Jadaan also said in the statement that the government would continue to implement development plans to diversify the economy, increase local content and support private sector growth, whether through the general budget or through PIF and development funds.

The kingdom, the world's largest oil exporter, slipped into a $9 billion budget deficit in the first quarter as oil revenue collapsed.

The finance ministry official said PIF is still going ahead with investments in domestic mega-projects under Crown Prince Mohammed bin Salman's diversification drive, including the $500 billion NEOM economic zone, the Red Sea tourism project, and Qiddiya, an entertainment development that will include a Six Flags theme park.

He said the fund has significant liquidity in riyals from its own portfolio and from proceeds from last December's initial public offering of state oil giant Saudi Aramco.

(Reporting by Marwa Rashad in Riyadh; Additional reporting by Hesham Abdul Khalek in Cairo and Davide Barbuscia in Dubai; Editing by Ghaida Ghantous and Matthew Lewis)

Stocks mentioned in the article
ChangeLast1st jan.
FACEBOOK 1.29% 248.04 Delayed Quote.19.40%
LINE CORPORATION -0.54% 5500 End-of-day quote.2.80%
LONDON BRENT OIL -0.50% 42.599344 Delayed Quote.-35.04%
SAUDI ARABIAN OIL COMPANY 0.45% 33.45 End-of-day quote.-5.11%
SEA LIMITED 0.67% 121.78 Delayed Quote.200.85%
THE NEW HOME COMPANY INC. 0.76% 3.335 Delayed Quote.-28.97%
UBER TECHNOLOGIES, INC. -0.83% 32.875 Delayed Quote.11.43%
WORLD CO., LTD. -5.40% 1420 End-of-day quote.-47.23%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
10:31aG7 finance ministers called for full implementation of G20 debt freeze - U.S. Treasury
10:30aWhite house taps u.s. chief technology officer michael kratsios to serve as pentagon’s acting chief technology officer -- white house official
10:30aWhite House to name Kratsios as Pentagon acting tech chief -- official
10:25aOPEC chief sees oil market moving closer to balance before key meeting
10:24aIndia's gem, jewellery exports in record fall - trade body
10:24aBill Ackman-backed blank check firm raises IPO size to $4 billion
10:21aRussia's Gazprom Neft sends its first oil cargo to China via Arctic route
10:21aTATA STEEL : Aakansha project records impressive result
10:19aOPEC chief sees oil market moving closer to balance before key meeting
10:16aBEA BUREAU OF ECONOMIC ANALYSIS : Annual Update of GDP Statistics Coming July 30
Latest news "Economy & Forex"