The amount of US debt owned by Saudi Arabia has been revealed by the US Treasury after four decades of secrecy.
The US Treasury said that the stockpile of debt amounted to $116.8 billion in March, down 6 per cent since January, in response to a Freedom of Information Act request by Bloomberg News.
China's US debt is considerably more at $1.3 trillion, while Japan holds $1.1 trillion. David Ottoway, a Middle East Fellow at the Woodrow Wilson International Centre, said it was surprising how little Saudi Arabia owned.
“The politics has always been secretive, so have their finances,” said David Ottaway, a Middle East Fellow at the Woodrow Wilson International Center, a research institute in Washington. “It does answer the question of how much they own, which is surprisingly not that much.”
The figure puts the world's largest oil-exporting nation among the top 14 holders of US debt in the world.
The US Treasury has up to now included Saudi Arabia in its category of "oil exporters", including Ecador, Venezuela, Infonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, the United Arab Emirates, Algeria, Gabon, Libya and Nigeria.
However the disclosure has raised new questions about how Saudi Arabia holds its debt.
Saudi Arabia's foreign reserves amount to $587 billion, a central banks typically put two thirds of their reserves in dollars, according data held by the International Monetary Fund. That means Saudi Arabia may have bought US debt through offshore centres that hold this debt on their balance sheets.
Belgium, which held $143 billion of U.S. government debt as of February, is home to Chinese custodial accounts, Bloomberg reported.
