Saudi Arabia plans to borrow 118 billion riyals ($31.5 billion) to finance its budget deficit this year, the finance ministry’s Debt Management Office (DMO) said in a statement yesterday.
According to the statement, the kingdom’s foreign borrowing strategy this year “would focus on enabling the kingdom to borrow most of its funding during the first quarter, to reduce exposure to market risks”.
The statement comes a few days before state-owned oil giant, Aramco, issues its first bonds in international markets.
Riyadh issued international bonds worth $7.5 billion in January.
In February, DMO Chief Fahd Al-Saif told Reuters that this year’s deficit funding would be allocated to cover part of the budget deficit of 131 billion riyals ($35 billion) while the remaining deficit would be met from government deposits at the central bank.
External borrowing comes as domestic borrowing intensifies in an unprecedented manner.
On Tuesday, the Saudi Ministry of Finance said it had sold around $1.6 billion in local currency debt with maturities of ten and 15 years, for the first time in the history of the kingdom.
Go deeper: Saudi Aramco Is The Most Profitable Company In The World, But Where Is All The Money Going? (Forbes)