THE kingdom’s finance ministry reportedly implied to start selling debt issued by the French Treasury if the G7 seized almost $300-B in Russian assets that were frozen during Moscow’s invasion of Ukraine.
Saudi Arabia’s holdings in euro and French bonds could total tens of billions of euros, based on current estimates.
While they might not cause a major impact if sold, what concerns European officials is that other countries will soon follow the oil-rich Gulf nation’s example.
Besides controlling the money supply, the bond market can predict inflation and the direction of the economy.
A large number of investors deciding to sell their holdings could lead to a dramatic drop in prices, a collapse in investments, and indicate underperforming assets.
Meanwhile, Saudi Arabia’s finance ministry denied the report it had made such a threat to the bloc.
In recent months, the G7 nations have been debating over what to do with roughly $260-B of frozen Russian money kept in their respective countries.
The U.S. and Britain are reportedly in favor of confiscating the funds and using them toward Ukraine’s reconstruction, however, the European nations are worried that collecting the profits from their treasury could destabilize and weaken the euro.
Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz was among the special guests invited to the G7 summit in Italy last month. He later apologized for not being able to attend the summit due to Hajj season.
