Analysts opine that this could ease out pressure on foreign reserves and improve the country’seconomy.Earlier in October 2016, the kingdom shifted to the conventional global debt market for the first timeand generated $17.5 billion in a bond issue. It was the largest bond issued by an emerging-market country.

In an attempt to reform the economy and dissolve the budget deficits caused by the setback in oil revenue since 2014, Saudi Arabia had sold domestic bonds and drawn on its accumulated reserves.

The official Saudi Press Agency quotes, “The ministry of finance received significant interest for the first international issue of the sukukprogramme with an order book from investors in excess of $33 billion.” There are two shares of $4.5 billion, one maturing in 2022 and another in 2027, reflecting “the strong fundamentals of the Saudi economy”.

Riyadh has anticipates a budget deficit of $53 billion in the current year. In a report this month, Saudi firm Jadwa Investment mentioned that the kingdom’s foreign reserves, which include securities, bank deposits and gold, had dropped to a near six-year low. “Reserves dropped to $514 billion in February, down $10 billion from the previous month and the lowest level since August 2011.Any new international sovereign bond, or indeed sukuk issuance, should alleviate the pressure on foreign exchange reserve withdrawals,” the researchers said.

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