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Saudi Arabia Decides to Enter Bond Markets Due to Dropping Oil Prices

© AP Photo / Hasan JamaliA Saudi man passes the al-Faisaliya tower in Riyadh, Saudi Arabia
A Saudi man passes the al-Faisaliya tower in Riyadh, Saudi Arabia - Sputnik International
Saudi Arabian authorities have decided to enter international bond markets as a result of the economic damage to the state budget caused by decreasing oil prices, media reported.

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MOSCOW (Sputnik) — Saudi authorities are likely to increase debt levels to up to 50 percent of the GDP within the next five years, the Financial Times reported Monday. According to previous forecasts, the 2016 debt level will not exceed 17.3 percent of the country's GDP.

The finalization of the bond program is expected to begin in January, the newspaper reported, citing an official source.

As of September, Saudi foreign reserves had dropped to $647 billion, a three-year low, due to falling oil prices.

The International Monetary Fund is likely to welcome the kingdom's decision to issue bonds, the media outlet reported, adding that the financial regulator earlier called for Saudi Arabia to increase its debt level.

Global oil prices have more than halved from summer 2014 levels, when the price of Brent crude stood at about $115 per barrel. Current oil prices are hovering just under $50 per barrel.

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