Saudi Holdings of US Treasury Bonds Rise by $2.4Bn in July

Saudi Arabia’s holdings of U.S. Treasury bonds rose by $2.4 billion in July compared to June 2022. The rise indicates that the Kingdom’s holdings of bonds increased to $121.6 billion in July as compared to $119.2 billion in June.

The month-on-month rise in U.S. Treasuries hit its highest since September 2021.

In the list of the largest investors in U.S. Treasury bonds, Saudi Arabia ranked 16th globally by the end of July. Japan was at the top of the list, followed by China, with investments worth $1.234 trillion and $970 billion respectively. 

The U.S. Treasuries held by foreign countries totaled to $7.5 trillion in July 2022.

Saudi Arabia’s holdings of the U.S. Treasuries have been fluctuating since the beginning of this year. In January, Saudi Arabia’s U.S. Treasuries holdings totaled $119.4 billion and then saw a general downward trend in the months leading up to June.

The holdings increased at the beginning of the year in January by $0.4 billion, and then they fell the next month by $2.7 billion in February, and once again fell the following month by $1.2 billion in March. The holdings went up again in April by $0.2 billion, and again in May fell by $0.1 billion. For the following two months, it continued to rise.

Economists and experts say the main driver of the fluctuations in Saudi holding is investments, reserve management, and liquidity considerations. 

The U.S. Treasuries market is the most liquid market in the world, making it the most reliable to park funds, experts explain. 

Long-term bonds amounted to $105.6 billion, which makes up 87 percent of the total U.S. Treasuries held by Saudi Arabia in July.  The short-term bonds were valued at $16 billion in July, which makes up to 13 percent of the total U.S. Treasuries.

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