Norway, you have competition: Saudi Arabia about to launch its first Sovereign Wealth Fund
Saudi Arabia is preparing to launch its first sovereign wealth fund to manage budget surpluses from a rise in crude prices estimated at hundreds of billions of dollars, state media reported Saturday.
The central bank has managed investment of the kingdom's foreign currency reserves until now, much of it in US Treasury bonds.
The consultative Shura Council is due to discuss a draft law for the National Reserve Fund in meetings Monday and Tuesday in Riyadh, state news agency SPA reported.
The report gave no indication of whether any change in investment strategy was envisioned.
The fund will be tasked with investing state reserves to "assure the kingdom's financial stability," Shura Council financial affairs committee Saad Mareq told Saudi daily Asharq Al-Awsat.
The newspaper said the fund will start with capital representing 30 percent of budgetary surpluses accumulated over the years in the kingdom, the world's largest exporter of crude oil.
Riyadh has built up significant foreign currency reserves because of rises in the price of crude oil on the international market.
There are no official figures available, but financial experts estimate its combined assets at around $700 billion (515 billion euros).
In the past three years alone, the kingdom has announced budget surpluses totalling some $232 billion.
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