LONDON, Aug 21: Saudi investors have withdrawn tens of billions of dollars from the United States because of concerns their assets might be frozen, the Financial Times reported Wednesday.
According to Youssef Ibrahim, a senior fellow at the US-based Council on Foreign Relations, Saudis have pulled out at least 200 billion dollars (204 billion euros) from the United States in recent months, the paper said.
Ibrahim said the withdrawal had been fulled by calls from some hardliners in the United States for a freezing of assets held by investors from oil-rich Saudi Arabia.
He said the outflows could pick up in response to the legal action launched last week in the United States against three members of the Saudi royal family, Sudan and several Gulf banks and charities by relatives of the victims of the September 11 atrocities.
The suit accuses them of covertly financing the al-Qaeda network and seeks 1,000 to 3,000 billion dollars in punitive damages for each of the 14 counts from 99 organizations or individuals.
It also seeks 100 trillion dollars in damages from Sudan.
According to the report, investors are believed to be shifting funds out of US private equity, stocks, bonds and real estate into European accounts.
But it added that some bankers in London said the largest established Saudi investors did not yet appear to be shifting money out of the United States.
It quoted one unnamed banker as saying: “I’m skeptical about a mass exodus.
“But there was a lot of Saudi money with American banks that was not diversified, now they (the Saudis) are spreading their wings.
“Perhaps 30 per cent to 50 per cent of the money that was with US banks is seeking diversification.”
Other experts also poured cold water over the thrust of the report.
“I would be skeptical, certainly of the figures, though I can see it emerging as a possible trend,” said Simon Williams, a senior economist at the Economist Intelligence Unit specialising in the Middle East.
“I would be surprised if it was anything like the kind of scale that’s been suggested by the FT,” he told AFP.
“That’s not to say it’s not necessarily happening or that there isn’t a significant trend of anti-US feeling in Saudia, but at the moment the data certainly isn’t convincing,” Williams added.
Currency dealers were also skeptical.
“We are far from convinced,” said Citibank economist Steve Englander.
“The (reported) numbers is huge, almost half of the US current account deficit.
“The dollar wouldn’t be at 0.98 (per euro) if it had happened,” he added.—AFP
