The Kingdom of Saudi Arabia pumps its money into many sectors including the possession of U.S. bonds. This made it the largest investor in the Gulf in the United States of America.
For many years, the investment in U.S. bonds has been the safest, being the strongest economy in the world, and a great force in terms of political stability.
Saudi Arabia maintained its position in the 14th place among the top holders of U.S. bonds until March 2021, to $130.8 billion.
Bonds are like an investment base based on borrowing. They are securities in which the issuer is obligated to pay the face value of the bond on its maturity date. The issuer would also pay interest periodically to its holder.
The U.S. bonds have enjoyed a great position in modern trade, as they have become one of the most popular modern trade methods.
Speculators may resort to U.S. bonds in the global stock market due to its convertibility and good returns, as well as a guarantee of its value recovery.
The U.S. Treasury bonds first appeared when the United States decided to enter World War I and found itself in need of money to finance the war.
The U.S. government continues to obtain financing for spending and to fill the budget deficit by selling Treasury bonds to this day.
Foreign banks, investment funds, large corporations or governments own very large amounts of U.S. Treasury bonds.
How much does Saudi Arabia own?
The total amount of U.S. bonds owned by foreigners, until March 2021, is $7,028.4 trillion. Japan owns $1240.3 billion worth of U.S. bonds, then China with $1,100.4 billion, up to Saudi Arabia, which has an estimated $130.8 billion in bonds. One billion dollars is ranked 14th in the world.
Saudi Arabia’s investments, until March 2021, amounted to $130.8 billion (490.5 billion Saudi riyals), compared to $132.9 billion (498.4 billion riyals) at the end of February the previous one.
These statistics reveal that Saudi Arabia reduced its holdings for the fourth consecutive month, at a time when it maintained the 14th position in the world among major investors in the American debt instrument.
The Saudi Al-Eqtisadiah newspaper said in a report in May 2021 that Saudi Arabia’s investments in the Treasury bonds amounted to $105.4 billion in long-term bonds, representing 81% of the total, while about $25.5 billion in short-term bonds, accounting for 19% of the total.
On an annual basis, Saudi Arabia’s balance of US Treasury bonds and bills decreased 17.8% ($28.3 billion) at the end of March 2021, compared to its balance at the end of the same month of 2020 of $159.1 billion.
Since the beginning of 2020, Saudi Arabia’s possession of US Treasury bonds and bills increased from $179.8 billion in December 2019, to $182.9 billion at the end of January 2020, and then to $184.4 billion at the end of February.
While it began to decline to $159.1 billion at the end of March 2020, $125.3 billion at the end of April, and $123.5 billion at the end of May, before returning to buying last June with the improvement of US economic indicators with the gradual conquest of the country.