RIYADH: Saudi Arabia’s international reserve assets reached SR1.75 trillion ($467.5 billion) in May, the highest in 18 months and an annual 6 percent increase, according to new data.

Figures released by the Saudi Central Bank, also known as SAMA, reveal that these holdings encompass monetary gold, special drawing rights, the International Monetary Fund’s reserve position, and foreign reserves.

According to May’s figures, international currency holdings – including currency and deposits abroad and investments in foreign securities – constituted 95 percent of the total, amounting to SR1.66 trillion.

This category also registered a 6 percent increase during this period.

SDRs comprised 4 percent of the total, amounting to SR77.68 billion, and increased by 0.3 percent during this period.

Created by the IMF to supplement member countries’ official reserves, SDRs derive their value from a basket of major currencies: the US dollar, euro and Chinese yuan as well as the Japanese yen, and British pound. They can be exchanged among governments for freely usable currencies when needed.

SDRs provide additional liquidity, stabilize exchange rates, act as a unit of account, and facilitate international trade and financial stability.

The IMF reserve position totaled SR12.72 billion, however decreased by 14 percent during this period. This category essentially represents the amount a country can draw from the IMF without conditions.

Fitch Ratings announced in March that it had affirmed Saudi Arabia’s long-term foreign-currency issuer default rating at “A+” with a stable outlook.

The agency highlighted that the Kingdom’s position reflects its robust fiscal and external balance sheets. It also noted improvements in governance driven by social and economic reforms, as well as efforts to enhance government institution effectiveness.

Saudi Arabia’s ratings are bolstered by its strong fiscal and external balance sheets, with government debt to gross domestic product and sovereign net foreign assets significantly stronger than the “A” and “AA” medians and substantial fiscal buffers in the form of deposits and other public-sector assets.

According to the agency, the Kingdom benefits from considerable fiscal buffers and boasts one of the highest reserve coverage ratios among rated sovereigns, at 16.5 months of current external payments.

Fitch anticipates reserves to decrease to an average of $420 billion by 2024 to 2025 due to a narrowing current account surplus offset by investments from entities like the Public Investment Fund.

Sovereign net foreign assets are also projected to remain above 50 percent of GDP during this period, surpassing the “A” median of 6 percent.

The IMF praised Saudi Arabia’s “unprecedented economic transformation” in a June report, attributing its success to prudent government policies and effective diversification efforts.

It also highlighted strong domestic demand, ongoing financial reforms, and environmental policies as key strengths in the Kingdom’s evolving economic landscape.

Following its official visit to the country, the IMF projected Saudi Arabia’s GDP growth to accelerate to approximately 4.5 percent by 2025, stabilizing at 3.5 percent annually over the medium term.

Non-oil growth is expected to reach 3.5 percent in 2024 before further increasing from 2025 onwards. Despite a projected decline in oil output in 2024 due to production cuts, there is anticipation for a recovery in 2025.

The IMF emphasized that Saudi Arabia’s diversification efforts are yielding positive results, stressing the need to sustain non-oil growth momentum, ensure financial stability, and enhance business competitiveness.