Saudi Arabia will place international bonds for the sum of $ 10 billion
Bloomberg, citing its sources, reports that Saudi Arabia is going to place international bonds. This week the kingdom has already planned to attract $ 10 billion. According to the sources, this refers to the bonds with a repayment term of 5, 10 and 30 years. Bloomberg notes that the willingness of Saudi Arabia to take these measures suggests that the financial situation of the kingdom, the world’s largest oil producer, is experiencing hard times.
Over the past 20 years, the budget deficit has reached its peak that forced the government to make the local bond placement. According to the publication, this gave them the opportunity to attract $ 63 billion. In addition, Riyadh had to reduce the salaries of the state employees. The output of the oil giant Saudi Aramco on the IPO has been also planned as a part of the budget revenue reduction.
In May this year, Bloomberg reported that Saudi Arabia was going to place bonds worth $ 15 billion in 2016. A couple of days ago, on October 17, the sources told The Financial Times that the Saudi Kingdom was planning to attract $ 20 billion.
The draft reforms, which are designed to reduce the dependence of the economy on oil prices, were approved by the Government of Saudi Arabia in April 2016. Prince Mohammad bin Salman Al Saud said that the goal of the reforms must be achieved by 2020.