© Fahad Shadeed / Reuters
Saudi Arabia's foreign holdings are 16 percent down on the same month in 2015 and are at their lowest level since February 2012. The holdings peaked in August 2014 at $737 billion falling with oil prices.
The assets are likely to consist of US dollars, securities like US Treasury bonds and deposits with banks abroad. The deposits reduced by $8 billion to $125 billion in July, but holdings in foreign securities grew by $2 billion to $371 billion after 10 straight months of contraction.
In an attempt to corner the global market and oust high-cost oil producers like US shale, Saudi-dominated OPEC introduced predatory prices for its oil, pushing crude from $114 a barrel in the summer of 2014 to the current $50.
Last year, the Saudi budget deficit hit an historic high of $98 billion. Riyadh expects this figure to drop to $87 billion. To cover some part of the deficit, the government has been borrowing domestically and abroad.
Despite this, the Kingdom has no plans to cap production, pumping a record 10.67 million barrels of oil per day in July.
Saudi Arabia also expects to issue its first international bonds in October to raise at least $10 billion. Citigroup, HSBC and JPMorgan Chase were hired as global coordinators for the sale, according to Bloomberg.
Comment: The Saudis have attempted to force their competitors from the oil game by driving prices down to the point where even they can barely make any money. At the same time they are waging what is proving to be an unwinnable war in Yemen where their only strategy is to throw money at it, in the form of ever-larger arms purchases (of which the US defense industry is the principle benefactor) and hiring mercenary armies, as their own military is a joke. Between these two ludicrous decisions, the House of Saud may very well have doomed itself.