External liquidity is comfortable even though the recent years have been less favourable for external asset accumulation. Years of very high current account surpluses (almost 20% of GDP on average during 2005-2014) have resulted in a high level of FX assets at the central bank.
In the short term, SAMA[1] FX assets are expected to decline for two reasons:
- More than a third of reserves (USD 181 bn in 2018) are government assets used to finance part of the fiscal deficit.
- The decline in oil production linked to the strike on oil facilities (September 14th) should turn the current account surplus into deficit (0.4% of GDP in 2019).
At end-2019, SAMA FX reserves should reach around USD 470 bn (24 months of imports of goods & services). This amount is sufficient to ensure the peg of the Saudi rial to the USD.
[1] Saudi Arabia Monetary Authority
