Saudi Arabia to proactively study additional financing operations in near term: NDMC

Hani AlMedaini, CEO of the National Debt Management Center

Saudi Arabia will proactively consider in the short term additional financing operations through the available financing channels, whether locally or internationally, including debt markets and alternative government financing, said Hani AlMedaini, CEO of the National Debt Management Center (NDMC).

NDMC will continue to work on monitoring the market and seizing opportunities in a proactive manner to enhance the quality of the debt portfolio, while considering the expected change in interest rates, Al-Eqtisadiah newspaper reported.

This comes while ensuring the Kingdom’s sustainable access to different debt markets to issue sovereign debt at a fair price within well-studied principles of risk management and the continued diversification of the investor base locally and globally.

As part of its 2022 annual borrowing plan, NDMC is keen to evaluate the issuance of domestic sukuk, in line with the business days of international markets, AlMedaini explained.

The sovereign debt risk unit is a key element in the Kingdom’s public debt strategy, as it balances the financing decisions with five risk factors, namely, liquidity, refinancing, returns, exchange rates and credit rating.

NDMC will optimally issue securities in line with the lowest risks to curb refinancing risks and maintain the average maturity of the Kingdom’s public debt. This policy increased the average life of the debt portfolio to 9.5 years in 2021.

The center will also focus on fixed-rate financing to alleviate risks. The debt portfolio had 83% fixed rates and 17% variable rates at the end of 2021, he concluded.