One of the biggest mysteries in global finance was revealed on Monday as the US Treasury Department announced the amount the United States owes Saudi Arabia.
Ending four decades of keeping the figure secret, the US Treasury Department said Saudi Arabia stockpiled $116.8 billion in US debt at the end of March. The pile puts the oil-rich kingdom among the largest foreign nation holders of American debt.
The figure makes Riyadh the 13th largest foreign holder of US debt, though well behind countries like China and Japan, which both had more than $1 trillion in Treasury securities at the end of March.
The Saudi figure was first reported by Bloomberg News based on a Freedom of Information Act request. The US Treasury Department kept Saudi Arabia’s exact holdings secret since the 1970s, unlike most other major owners of US debt. The kingdom’s holdings were lumped together with that of other oil exporting countries, including Venezuela and Iraq.
The new Treasury report also revealed that the Cayman Islands, a country of less than 60,000 people, owned $265 billion of US Treasuries end of March, making it the third-highest sum in the world and a reflection of the nation’s tax haven status.
According to the report, it is possible that Saudi Arabia owns even more US debt than what was revealed. Saudi Arabia could be taking hints from China. Many analysts believe China owns US debt through custodial accounts in Belgium, a relatively tiny country that listed owning over $154 billion of US Treasuries as of March.
Since the end of 2014, the Saudis have burned through more than $130 billion of foreign-exchange reserves, presumably including US debt, to help cope with the crash in oil prices. The Treasury Department said Riyadh’s US debt holdings of $116.8 billion are down from $123.6 billion in January.
Further, the Saudi government has threatened to sell off hundreds of billions of dollars’ worth of American assets if the US Congress pass a bill that could hold the kingdom responsible for any role in the September 11, 2001 attacks.