A recent press report said that Saudi Arabia’s central bank is not interested in buying distressed or speculative assets such as troubled European debt and gold. The world’s No. 1 oil exporter like most of its Gulf Arab neighbours is a major holder of dollar assets as its riyal currency is pegged to the greenback and crude accounts for 85 percent of its budget revenue. Jasser said that they always have a much more integrated reserve investment strategy which looks at it in a continuous and dynamic way that values security, safety and liquidity and therefore we do not look opportunistically at distressed assets or special assets that come up one way or the other, after a meeting of the Group of 20 countries in Paris.
Gold, which has tumbled from a record high of above $1,920 an ounce, is another asset of little interest to the Saudi central bank due to its volatility, Jasser said that they have gold in their reserves but they have not bought and not sold it in a very long time. It has become a very speculative asset and they do not get into any speculative assets. Jasser said that the central bank was going to stick to this strategy. Boosted by robust oil prices of above $100 per barrel this year, the Saudi central banks net foreign asset reserves have climbed steadily to a record high of 1.879 trillion riyals ($500 billion). Gold reserves have been unchanged at 1.556 billion riyals since 2008, the central bank’s data show. Jasser also said that U.S.
Treasuries continued to be an important safe haven and major asset in global financial markets where 62 percent of global reserves are still in U.S. assets. A downgrade of the United States’ top-notch ‘AAA’ credit rating by Standard & Poor’s shocked the global markets but had no adverse impact on its bonds.