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Saudi Arabia borrows $4 billion from local market

A man counts Saudi riyal banknotes at a market in Riyadh, Saudi Arabia on 3 October 2016 [Fayez Nurdeline /AFP/Getty Images]
A man counts Saudi riyal banknotes at a market in Riyadh, Saudi Arabia on 3 October 2016 [Fayez Nurdeline /AFP/Getty Images]

While its public budget suffers a growing deficit due to the tumbling oil prices and the spread of the novel coronavirus, the Saudi Ministry of Finance revealed that the kingdom has sold local bonds (Islamic debt bonds) worth 15.568 billion Saudi riyals ($4.15 billion) in March.

In the details reported by the Saudi Press Agency (SPA), the Ministry of Finance announced that it had finished receiving investor requests for its local issue for this month, under the government's bonds program, as the issue was determined with a total amount of 15.568 billion Saudi riyals.

The issues were divided into 3 tranches as follows:

– The first tranche is worth 170 million Saudi riyals, bringing the final amount of the tranche to 2.743 billion Saudi riyals for bonds to be due in 2025.

– The second tranche is worth 504 million Saudi riyals, bringing the final amount of the tranche to 8.346 billion Saudi riyals for bonds to be due in 2030.

– The third tranche is worth 14.894 billion Saudi riyals, bringing the final amount of the tranche to 14.894 billion Saudi riyals for bonds to be due in 2050.

The new releases come while Saudi Arabia experiences additional difficulties in marketing huge quantities of its oil production, amid the price war it is waging with Russia, which led to the collapse of the price of Brent crude to below 30 dollars.

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