Saudi Arabia withdrew 244 billion riyals ($65.1bn) from its general monetary reserve during the first five months of 2015, a Saudi official said.
The governor of the Saudi Arabian Monetary Agency (SAMA), Dr Fahad Al Mubarak, said at a press conference on Thursday that the Kingdom intends to use the fund to meet the expected budget deficit due to the decline in oil prices.
90 per cent of Saudi Arabia’s revenues come from oil sales.
Mubarak said his country has also issued government bonds worth 15 billion riyals ($4bn) during the last two months, expecting Saudi public debt to rise during the year 2015.
Saudi Arabia estimated its expenditures for the year 2015 to reach 860 billion riyals ($229 bn) with revenues estimated at 715 billion riyals ($191 bn), resulting in an expected deficit of 145 billion riyals ($39bn), equivalent to 0.5 per cent of gross domestic product at current prices.
Saudi Arabia’s public debt fell in 2014 to 44.26 billion riyals, equivalent to 1.6 per cent of GDP, compared with 60.1 billion riyals in 2013.
The price of crude oil reached $57.75 a barrel on Thursday compared with $115 in June 2014.
Mubarak said he expected the deficit to rise to over 145 billion riyals after the government paid two months’ salary to all public employees in January. King Salman bin Abdulaziz ordered the payment when he came to power after the death of King Abdullah bin Abdul Aziz.
Mubarak said “Saudi Arabia does not target inflation at zero or subzero, since developed countries are seeking to raise their inflation to 2 per cent, which is roughly the same levels that we have where inflation reached last June; 2.2 per cent which is a low rate compared to previous years due to the increase in riyal exchange rate in addition to the low prices of food commodities globally, and the decline in oil prices and housing.”
Mubarak stressed that the Saudi banking sector and investments managed by SAMA are not linked to the current Greece crisis.