First major Saudi Government borrowing in 25 years

Saudi Arabia Bond Offering

Saudi Arabia has begun its third bond offering in a month in money markets unsettled by rising dollar interest rates and uncertain oil prices.

The Saudi Arabian Monetary Agency, in a telex Saturday, offered banks 1.5 billion riyals, or $400 million, worth of Government development bonds in one-to-five-year maturities.

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The offering came amid strong speculation among bankers that the Government, squeezed by falling oil revenues and a dollar firming on international exchanges, would soon devalue the riyal.

A devaluation would increase riyal earnings from oil exports, because most Government oil revenues are received in dollars.

The bonds program, the first major Saudi Government borrowing in 25 years, was begun to help bridge an anticipated budget deficit of 35.9 billion riyals, or about $9.6 billion

REUTERS
Published: July 12, 1988

Source: The New York Times

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