16-May (Bloomberg) — 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.
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.
“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.”
PG View: Why did the Saudis get to keep this info secret in the first place? Is this release to mitigate the Saudi threat to sell Treasuries if Congress passes legislation that would open the Kingdom to lawsuits associated with 9/11?
MK note: Hey, Pete. Not sure what’s going on here but the Treasury Department has been publishing Saudi Treasuries holdings since 2012. Prior to that, it appears Saudi holdings were aggregated under “Oil Exporters”. Looks like they removed that designation from the tables in 2012 and broke it out by country. Here’s the history as published by the Treasury Department in TIC data:
I too see the number as low and not much of threat to international stability, but is it the real number?
What is even more astonishing to me about the Saudi situation is that it does everything possible to undermine the oil price, which in turn undermines its own economy. It then borrows $10 billion through a consortium of international banks (end of April) to shore up things. Why borrow the money when you have it sitting in reserves? A long way from King Saud personally counting the 35,000 British sovereigns he received for the first oil concession with the West in 1933. And now oil is back to $50/bbl. . . .Go figure. . . . .