Saudi central bank's foreign assets drop by $6 billion in July

August 28, 2016 9:12 AM EDT

A Saudi money exchanger counts Saudi riyals in Riyadh August 4, 2008. REUTERS/Fahad Shadeed

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DUBAI (Reuters) - Net foreign assets at Saudi Arabia's central bank fell to $555 billion in July, down $6 billion from the previous month, as the government drew on reserves to cover a budget deficit caused by low oil prices, official data showed on Sunday.

Assets shrank by 16 percent from a year earlier to their lowest level since February 2012. They reached a record high of $737 billion in August 2014 before starting to fall.

The assets are believed to be mainly denominated in U.S. dollars, in the form of securities such as U.S. Treasury bonds and deposits with banks abroad.

Those deposits fell by $8 billion from the previous month to $125 billion in July, but holdings of foreign securities rose by $2 billion to $371 billion after shrinking for 10 straight months. The central bank did not disclose details of its securities purchases.

The government has also been borrowing domestically and abroad to cover part of its deficit, which totaled nearly $100 billion last year.

Bankers expect it to conduct its first international bond issue to raise about $10 billion or more by the end of October.

(Reporting by Andrew Torchia; Editing by David Goodman)

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