Saudi Sovereign Wealth Fund seizes $40bn from FX reserves to fund oversees investment

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Saudi Sovereign Wealth Fund seizes $40bn from FX reserves to fund oversees investment

On Friday, the Kingdom of Saudi Arabia’s Finance Minister said in a statement that the oil-dependent nation’s sovereign wealth fund, widely known as the PIF (Public Investment Fund) that demeanours oversees investments, had snatched up a stark upsum of $40 billion or 150 billion Saudi riyals from the country’s Central Bank FX reserves, suggesting an uptick in Saudi foreign investment amid dwindling assets’ prices across the globe stemmed from the pandemic-led fiscal rout.

In point of fact, latest development on Saudi’s Sovereign Wealth Fund came forth less than a week after media headlines had reported that the oil-rich Kingdom’s public investment fund had been scaling up assets in a number of US holdings including some heavyweight lenders alongside equity investment funds such as KKR, while the OPEC kingpin seems to be taking advantage of a global equity market which has been running low on liquidity in context of a simmering pandemic outbreak.

Besides, while the Saudi Finance Minister Mohammed al-Jadaan, long-contemplated as a close ally to Saudi Crown Prince Mohammed bin Salman alongside an advocate of the crown prince’s vision 2030, said on his Friday’s statement that the fund transfers were executed on an “exceptional basis,” an official of Saudi PIF was quoted saying on Friday that the $40 billion allotted to Saudi PIF had already been converted in to US Dollar in order to back foreign investments, mostly in the United States.

Saudi FX reserves witness record fall in decades as PIF seeks to shore up assets in US holdings

Meanwhile, adding that the “exceptional measure” to relocated an upsum of $40 billion into the Saudi PIF would not be included in the annual statement of the Central Bank, whose FX reserves fell by the steepest rate in nearly two decades by $27 billion in March to roughly $464.5 billion, Jadaan said in the statement, “While foreign exchange flows since the start of the year are on average within historical levels, this measure (transfers to PIF) resulted in a reduction in net foreign reserves assets to support investment plans.