Following a Freedom-of-Information Act request, the Treasury yesterday revealed a breakdown of Saudi Arabia's holdings of US debt for the 11th time since 1974; it shows Saudi Arabia has stockpiled $116.8bn of US Treasuries as of March, a total that some analysts say leads to more questions than answers. Saudi Arabia has $587bn of foreign reserves and the US debt holdings only represent 20% of that, which is far below the two thirds level international central banks normally hold in dollar-denominated assets, meaning that Saudi Arabia could own even more US debt than has been revealed. It may be that it is copying China, which many analysts believe owns more US debt through custodial accounts in Belgium. This mystery is of increasing significance given that since 2014, the Saudis have burned through more than $130bn of foreign exchange reserves, most likely US debt, to help cope with the oil price crash. Furthermore, as we previously noted, hanging over this is the Saudi threat to sell $750bn in dollar assets should Congress pass a bill allowing the monarchy to be held liable for the first September 2001 terror attacks.
Following a Freedom-of-Information Act request, the Treasury yesterday revealed a breakdown of Saudi Arabia's holdings of US debt for the first time since 1974; it shows Saudi Arabia has stockpiled $116.8bn of US Treasuries as of March, a total that some analysts say leads to more questions than answers. Saudi Arabia has $587bn of foreign reserves and the US debt holdings only represent 20% of that, which is far below the two thirds level international central banks normally hold in dollar-denominated assets, meaning that Saudi Arabia could own even more US debt than has been revealed. It may be that it is copying China, which many analysts believe owns more US debt through custodial accounts in Belgium. This mystery is of increasing significance given that since 2014, the Saudis have burned through more than $130bn of foreign exchange reserves, most likely US debt, to help cope with the oil price crash. Furthermore, as we previously noted, hanging over this is the Saudi threat to sell $750bn in dollar assets should Congress pass a bill allowing the monarchy to be held liable for the 11th September 2001 terror attacks.