Increase in the assets of the Saudi Central Bank (SAMA)
In a strong indicator of the robustness of the Saudi economy and the stability of its financial sector, the monthly bulletin issued by the Saudi Central Bank (SAMA) revealed significant positive developments in the size of its assets. SAMA's assets rose to approximately SAR 1.905 trillion by the end of February. This figure represents a 1.7% year-on-year increase, compared to approximately SAR 1.872 trillion recorded during the same period of the previous year. Despite this positive annual growth, the data showed a slight decrease in the value of assets of 1.5% month-on-month, reflecting the normal dynamics of liquidity and cash flow management.
Details of investments and securities abroad
Regarding the details of these assets, securities accounted for the largest share. The Saudi Central Bank's investments in foreign securities reached approximately SAR 1.049 trillion during February. This figure reflects a significant increase of 5.78% year-on-year and a 2.2% increase month-on-month. These investments are considered the cornerstone of the bank's assets, representing 55% of total assets.
On the other hand, the bulletin showed that the value of deposits with banks abroad reached about 434.66 billion riyals, recording a significant jump of 30.2% on an annual basis, while it witnessed a decline of 5.5% compared to the previous month.
Historical context and pivotal role of the central bank
The Saudi Central Bank (formerly the Saudi Arabian Monetary Authority) was established in 1952 and has since played a crucial role in managing the Kingdom's foreign reserves and maintaining monetary and financial stability. Historically, SAMA's assets have been closely linked to the Kingdom's oil revenues, returns on sovereign investments, and the size of government spending. The Kingdom pursues a conservative and prudent investment policy focused on safe and highly liquid assets, such as US Treasury bonds and deposits in high-rated international banks, to ensure its ability to meet any financial obligations and support the Saudi Riyal's peg to the US Dollar.
Importance and expected impact at different levels
Domestically, this increase in SAMA's assets reflects the Kingdom's ability to build strong financial buffers. These buffers are essential to supporting the massive development projects associated with Saudi Vision 2030 and to bolstering the confidence of local and foreign investors in the resilience of the Saudi economy and its capacity to absorb global economic shocks.
Regionally and internationally, the Kingdom of Saudi Arabia represents the largest economy in the Middle East and North Africa region and is an active member of the G20. The stability and growth of the Saudi Central Bank's assets contribute to strengthening regional financial stability. Furthermore, the scale of its investments in securities and deposits abroad makes the Kingdom an influential player in global financial markets, as these cash flows contribute to providing liquidity and supporting the stability of the international financial system. The diversification in asset management, as demonstrated by the allocation of assets between securities and deposits, underscores the strategic approach adopted by the Kingdom's financial leadership to maximize returns and minimize risks.
