DUBAI: The Saudi Arabian central bank’s foreign reserves rose in November for a second straight month, in a sign that higher oil prices may be reducing pressure to draw them down, official data showed on Thursday.

The bank’s net foreign assets expanded by $1.0 billion from October to $486.9 billion last month, after increasing $8.3 billion in October.

It was the first time since mid-2014 that the reserves rose for two consecutive months.

The government has been liquidating the reserves, which peaked at $737 billion in August 2014, to cover a big budget deficit caused by low oil export receipts; a 15 per cent jump in oil prices in the past three months has improved state finances.

However, economists believe Riyadh has also been diverting some of the assets to build up its top sovereign wealth fund, the Public Investment Fund, which is taking a key role in developing the economy. Changes in the pattern of these transfers, rather than higher state revenues, may be boosting the reserves.

Also, the dollar fell against many other currencies in November, inflating the value of the non-dollar portion of the reserves.

The foreign assets are held mostly in the form of securities holdings and bank deposits, both of which edged up in November.

Published in Dawn, December 29th, 2017