Saudi Arabia has been increasing its holdings of US Treasury bonds by billions of dollars ahead of a visit by President Donald Trump and economic talks at which Riyadh aims to obtain investment and technology from the United States.
Saudi holdings of US government bonds climbed to a one-year high of $114.4 billion in March from a low of $89.4 billion last September, the most recent data from the US Treasury Department shows. Compared to 12 months ago, the Saudi holdings were almost unchanged.
That was striking because Riyadh has liquidated many of its other overseas assets over the past year to cover a budget deficit caused by low oil prices; the Saudi central bank’s holdings of all types of foreign securities combined shrank by about $40 billion in the 12 months through March.
Saudi Arabia will be Trump’s initial stop on his first international trip as president, signifying the new US administration’s intent to reinforce its relationship with a top ally in the Middle East, particularly on security matters.
Riyadh also wants close economic ties with the United States as it tries to cut its dependence on oil by diversifying its economy. During Trump’s visit this weekend, dozens of senior executives and economic officials from both countries will discuss proposed investment projects in non-oil industries.
The US data showed Saudi Arabia was the 12th biggest foreign investor in Treasuries.