Saudi Arabia’s record-breaking US$17.5bn sale of international bonds will finance around a third of next year’s budget deficit and almost all of the current account shortfall, so the Kingdom’s foreign exchange reserves are unlikely to fall much beyond their current level in the coming years. This should dampen any lingering concerns that the riyal will be devalued. The government’s debt-to-GDP ratio will rise as a result of the bond sale but, given its low starting point, it is hardly on a worrying path.
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