Saudi bond issues likely to resume in Q1, says Al-Jadaan

Saudi Arabia is expected to resume monthly domestic bond issues in Q1-2017 but will ensure that such sales will not impact the private sector financing needs or the banking sector’s liquidity, Reuters reported on Thursday, citing the kingdom’s finance minister, Mohammed Al-Jadaan.

“We have a very limited deficit this time so our needs are limited and we have a cushion... Generally yes, we will need to go to the local markets and we will make sure that we don't crowd out the private sector,” Al-Jadaan said.

The expected decline in next year’s deficit reduces the need for finance, when compared to 2016.

Meanwhile, the kingdom is planning to tap international debt markets to finance deficit in 2017, and also to continue drawing down from foreign assets, but at a lower rates, compared to those of 2016, Al-Jadaan added.

Saudi Arabia is planning to borrow between $10 to $15 billion from international markets and nearly SAR 70 billion from the domestic market in 2017, Mohammad al-Tuwaijri, secretary-general of the Finance Committee at the Royal Court, told Al Arabiya television channel.

The kingdom’s public debt increased to SAR 316.5 billion by the end of 2016, representing 12.3 percent of gross domestic product (GDP), compared to SAR 142 billion in 2015.