JEDDAH: Saudi Arabia’s US Treasury holdings are more than a line item in a monthly report — they are a barometer of the Kingdom’s financial strategy, a measure of its confidence in the global economic order, and a cornerstone of its economic diversification efforts.
Commenting on how Saudi Arabia decides how much to invest in US Treasury securities at any given time, and what strategic goals it aims to achieve through these holdings, Qaiser Noor, executive director and board member at 1957 Ventures, JS Bank, Tiqmo and Owais Capital, described the Kingdom’s approach as disciplined and hierarchical.
“Saudi Arabia calibrates US Treasury allocations primarily to safeguard the riyal’s dollar peg and ensure ample, immediate US dollar liquidity for external payments. Reserve management follows the classic hierarchy of objectives, safety, liquidity, then return, so Treasuries anchor the liquid ‘core’ while duration is adjusted tactically with market conditions,” he told Arab News.
He added: “Oil revenue cycles, fiscal outflows, and expected foreign exchange liquidity needs are key inputs; the aim is to preserve capital and shock-absorb balance-of-payments volatility, along with optimizing yield.”
