RIGZONE – Saudi Ministry to Discuss Deficit Financing with Central Bank.
RIYADH, Dec 26 (Reuters) – Saudi Arabia’s Finance Ministry will discuss with the central bank its options for financing the large state budget deficit expected next year, and may cover some of the shortfall with borrowing, Finance Minister Ibrahim Alassaf said. Responding to the plunge of oil prices, the ministry announced on Thursday a 2015 budget plan which envisions a deficit of 145 billion riyals ($38.7 billion). A ministry statement said the government could cover the deficit with its huge fiscal reserves, but Alassaf told Al Arabiya television late on Thursday that borrowing might also be used. “There is also a chance to borrow at good rates – this topic will be discussed with colleagues at the Saudi Arabian Monetary Agency at the appropriate time,” he said. Alassaf did not elaborate on the types of borrowing which might be used. Although Saudi state-run agencies and state-owned firms have occasionally issued foreign- and local-currency bonds in recent years, the government itself has not, preferring to pay down its debt.
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