The Treasury Department released a breakdown of Saudi Arabia’s holdings of U.S. debt, after keeping the figures secret for more than four decades.
The stockpile of the world’s biggest oil
exporter stood at $116.8 billion as of March, down almost 6 percent from a
record in January, according to data the Treasury disclosed Monday in response
to a Freedom-of-Information Act request submitted by Bloomberg News. The tally
ranks Saudi Arabia among the top dozen foreign nations in terms of holdings of
U.S. debt, and compares with China’s $1.3 trillion trove, and $1.1 trillion for
Japan.
“The politics has always been secretive,
so have their finances,” said David Ottaway, a Middle East Fellow at the
Woodrow Wilson International Center, a research institute in Washington. “It
does answer the question of how much they own, which is surprisingly not that
much.”
Yet the disclosure may bring more
questions than answers, because Saudi Arabia’s foreign reserves amount to $587
billion, and central banks typically put about two-thirds of their coffers in
dollars, according to International Monetary Fund data. Some nations accumulate
Treasuries in offshore financial centers, meaning the holdings show up under
the data of other countries. For example, Belgium, which held $143 billion of
U.S. government debt as of February, is home to Chinese custodial
accounts, analysts say.
In a sign that Treasury’s figures on the
kingdom’s ownership fall short of the full tally, the New York Times reported
last month that Saudi officials threatened to sell $750 billion of Treasuries
and other assets in the U.S. if Congress enacts a bill allowing the monarchy to
be held responsible in American courts for any role in the Sept. 11, 2001,
terror attacks.
Calls and e-mails to the Saudi Finance
Ministry and the Saudi Arabian Monetary Agency outside of regular working hours
weren’t answered or returned.
The U.S. started releasing data on
foreign ownership of Treasuries in 1974. Since then, the Treasury’s policy had
been to not disclose Saudi holdings, and it grouped them instead with those of
14 other mostly OPEC nations, including Kuwait, Nigeria and the United Arab
Emirates, Bloomberg reported in January. The group held $281 billion as of
February, down from a record of $298.4 billion in July.
For more than a hundred other countries,
from China to the Vatican, the Treasury had provided a detailed monthly
breakdown of how much U.S. debt each owns. The figures for March are scheduled
for release at 4 p.m. New York time Monday.
1970s Decision
The special arrangement was a product of
the 1973 oil shock following the Arab embargo. It’s among concessions that U.S.
administrations made over the years to maintain America’s strategic
relationship with the Saudi royal family and access to the kingdom’s oil
reserves.
The question of Saudi holdings of
Treasuries is gaining importance as the monarchy faces fiscal pressure from the
decline in oil prices and costly wars in the Middle East.
In the past year, Saudi Arabia burned
through 16 percent of its foreign-exchange reserves to plug its biggest budget
shortfall in a quarter-century, according to data from the kingdom’s central
bank. The signs of strain are prompting concern over Saudi Arabia’s potential
influence on the world’s largest and most important bond market.
Saudi holdings of Treasuries peaked at
$123.6 billion in January, the data released Monday show.
“As we look at official and central bank
and investment holdings of Treasuries around the world, we’ve seen a lot of
fluctuations, we’ve seen a gradual erosion of positions that have been held for
some time,” said Jim Vogel, head of interest-rate strategy at FTN Financial in
Memphis, Tennessee. The impact of those reductions has been mitigated by
purchases by overseas private investors, he said.
Following is a table of #U.S._debt_holdings of the oil-producing nations for which the Treasury released data
Monday:
|
Country
|
USD Bln
|
|
Saudi
Arabia
|
116.8
|
|
United
Arab Emirates
|
62.5
|
|
Kuwait
|
31.2
|
|
Oman
|
15.9
|
|
Iraq
|
13.4
|
|
Qatar
|
3.7
|
|
Nigeria
|
3.1
|
|
Bahrain
|
1.2
|
|
Algeria
|
0.7
|
Source: U.S. Treasury Department. Data
as of March.
No comments:
Post a Comment