Saudi Arabian Monetary Agency (Sama) net foreign assets were 930 billion riyals ($248bn) in August, down 1.2 per cent from July, in their first monthly drop in at least a year, according to Sama data. "It was expected, it's nothing unusual," said John Sfakianakis, chief economist at SABB Bank, HSBC's subsidiary in the kingdom.
"It could mean that instead of strengthening Sama's foreign asset position, some of the money might have been repatriated," he said.
"Saudi is selling oil at a high price and they are getting excellent receipts for that, and that money might have not been placed in the central bank's net foreign assets".
Khan Zahid, chief economist for Riyad Bank, said the drop in net foreign assets might have nothing to do with oil receipts. "If anything they would have gone up since oil prices are hitting record levels," he said.
One analyst, speaking on condition of anonymity, said the dollar's fall and the subprime crisis in the US contributed to the decline in Sama's assets.
"They invest in safe instruments ... including U.S. and European treasury bonds. Sama might have operated a readjustment of the value of its assets after the decline in the dollar and the recent turmoil in the US financial market," he said.
But Sfakianakis argued that the recent surge in oil prices has more than offset any impact the decline in the dollar might have had on the kingdom financial position.
Sama governor Hamad Al Sayyari has said the central bank would control abundant liquidity to tame inflation, which rose in July at the fastest pace in seven years to 3.83pc, more than double its level in last year.
