Saudi Arabia's foreign assets gained nearly SR74 billion to cross the SR2,000 billion (SR2 trillion) mark for the first time, Saudi Arabian Monetary Agency (SAMA) said in its monthly bulletin for September. The assets peaked at an all time high of SR2,001.7 billion ($533.5 billion) at the end of September, an increase of nearly SR74 billion over their level of SR1,926 billion ($514 billion) at the end of August. Saudi Arabia's foreign assets have steadily grown in most of the past 10 years as a result of strong crude prices, gaining nearly SR135 billion through 2010. They recorded one of their largest increases of around SR513 billion during 2008, when oil prices climbed to their highest annual average of nearly $95 a barrel. But a sharp fall in crude prices depressed them by SR139 billion in 2009 to widen the actual budget shortfall to nearly SR87 billion following a record high surplus of nearly SR580 billion in the previous year. From SR1,365 billion at the end of August, investment in foreign securities soared to nearly SR1,387 billion at the end of September while deposits with banks abroad surged from SR357.2 billion to SR390.8 billion, SAMA said. Since the end of 2010, SAMA's foreign assets have gained a whopping SR296 billion ($80 billion) as a result of higher oil prices and the country's crude production, which has remained above nine million bpd this year. SAMA will keep its key interest rates unchanged for November and signs that inflation remains under control, people familiar with the matter said Saturday. SAMA, in a circular sent to the Kingdom's banks, said that it will hold its overnight reverse repo rate at 0.25 percent, and the benchmark repurchase rate at 2 percent, the people said. Inflation in Saudi Arabia is likely to drop back below 5 percent by the end of this year as international food prices stabilize and the cost of housing in the kingdom eases, SAMA Governor Muhammad Al-Jasser said earlier. "The overall average inflation for this year has not exceeded 4.8 percent...and I would not expect it by the end of this year to be above 5 percent," he said. The surge in assets was a result of higher oil prices and output. World oil prices fell Friday as investors took profits from bumper gains made during a week that saw the promise of a comprehensive plan to rescue the euro zone. New York's main oil contract, light sweet crude for delivery in December, slipped 64 cents to $93.32 a barrel. Brent North Sea crude for December lost $2.17 to $109.91. The New York price was still well above the $86.31 close of a week before, after encouraging news on growth in China and the US, and Thursday's EU pact, fed expectations of firm demand. Brent though was only slightly higher than the previous Friday's $109.54 as the gap between the two benchmarks appeared to be narrowing.
