Bloomberg/Simon Dawson
Saudi Arabia may tap international debt markets as early as next month as it seeks funding to help bridge its widening budget deficit, reported Bloomberg.
Fahad Al-Saif, the Head of the Finance Ministry’s Debt Management Office, said, “Most of the debt will be local and around 45 per cent will be raised overseas through Sukuk and conventional bonds.”
“The country will also refinance roughly SAR 44 billion riyals ($11.7 billion) of existing local debt,” said Al-Saif.
The debt office said that they will be ready by January 2020 and it will start assessing the market openings for the issuance.
Additionally, the total debt requirement next year will be as much as SAR 120 billion, the new debt will be up to SAR76 billion and of that new debt, SAR 30 to 35 billion will be international.
The budget, announced this week, marks a shift away from the fiscal stimulus that helped power non-oil economic growth this year to the fastest since 2015. The world’s largest oil exporter is embarking on three years of spending cuts as it looks to private businesses to take the lead.
In the mid-term, Saudi Arabia is considering selling bonds or Sukuk in currencies other than the dollar and the euro, which it’s already issued in, said Al-Saif.
Al-Saif said that the issuance is not part yet of his annual borrowing plan, but it is part of the medium-term debt strategy—which is keeping an assessment and keeping an eye on other markets that may develop.
The debt office is also looking at alternative options including export credit agency financing, said Al-Saif.
“We are now engaged in ECA financing that actually makes sense to be plugged into the portfolio, also infrastructure finance, project finance it depends. There are certain governmental projects that we could finance away from the debt capital markets,” added Al-Saif.
MOST READ
ECONOMY
Refinitiv partners with Complyfin in the UAEECONOMY
Jordan agrees $1.3 billion IMF programmeECONOMY
US and China sign phase one of the trade...ECONOMY
Turkish lira falls as regulator intervenesECONOMY
Egypt cuts interest rates by a percentage pointECONOMY
China agrees with US to roll back tariffs in...ECONOMY
Dubai FDI signs MoU with Standard Chartered BankECONOMY
BB/B ratings affirmed for Oman; outlook negativeECONOMY
EU seeks to halt US tariffs over Airbus aid...ECONOMY
US weighs currency pact with China as part of...
CPI Financial was established in Dubai in 1999 to meet the needs of an ever-expanding financial community, offering a comprehensive portfolio of market-leading products and services tailor-made for the banking and financial services sectors.
Loading More post
