By Mohammed Abu Meleeh

Riyadh-Mubasher: Saudi Arabia, the world’s biggest oil exporter, plans to return to the bond market to raise $27 billion by the end of 2015, in order to avoid the impact of falling oil prices.

The kingdom’s central bank has been sounding out demand to issue nearly SAR 20 billion ($5.3 billion) a month in bonds, in tranches of 5, 7 and 10 years for the rest of the year, bankers told Financial Times.

Fahad Al-Mubarak, governor of the Saudi Arabian Monetary Agency (SAMA), earlier said that Riyadh had already issued its first $4 billion in local bonds, the first sovereign issuance since 2007.

Oil decline accelerated in November when Opec decided not to cut output, a major departure from its traditional policy of trimming production to prop up prices.

Saudi Arabia said it was attempting to defend market share against rivals such as the US shale industry.

However, the decision led to a sustained period of lower prices, which pressured the finances of major oil exporters, including Saudi Arabia which requires an oil price of $105 a barrel to balance its budget.

The kingdom has drained $65 billion of its fiscal reserves in order to maintain government spending since the oil price plunge began.

SAMA currently has $672 billion in foreign reserves, down from their peak of $737 billion in August 2014.

The monthly bond issuance plan is likely to cover only part of the deficit, which economists estimate will reach SAR 400 billion this year amid falling revenues and continuing high expenditure on big infrastructure projects.

Translated by Abdul Maguid Aboshahla