RIYADH: Saudi Arabia’s strategic financial position remains strong despite sinking oil prices despite “lingering pressure” on bank liquidity, said finance minister. The kingdom faces a budget deficit of $87 billion this year with a steep fall in oil revenues, accounting for most of its income. In a recovery attempt to cover the fiscal gap, Riyadh drained its foreign reserves, issued domestic bonds with a raise of $17.5 billion in its first international bond offering. Future seems gloomy for Saudi Arabia with a possibility of exhausting financial assets in 5 years, warns IMF “We have been able to maintain a good position in public finances,” Ibrahim al-Assaf told a seminar, the official Saudi Press Agency reported late on Tuesday. However the kingdom’s banks are still maintaining strong balance sheets and relatively high levels of capital adequacy and liquidity ratios, “despite some pressure on liquidity at the system level in general,” he said. A tightening of bank liquidity after the issuance of domestic bonds was the main reason Saudi decided to borrow abroad, an economist has said. Saudi banks’ loan-to-deposit ratio rose for the fifth consecutive month in August, reaching 90.8 percent, because of faster growth in credit relative to deposits, Riyadh’s Jadwa Investment said in a report this month. Borrowing abroad also reduces the drain on the kingdom’s foreign reserves. Official figures show those reserves declined to $562 billion in August from $732 billion at the end of 2014. Assaf said officials “continue to periodically review our policies relating to financial stability”. Saudi Arabia has taken a series of austerity measures, including subsidy cuts and reductions in government salaries. Earlier this year, it announced a wide-ranging plan to diversify its economy. Saudis to give Pakistan $122m in aid Assaf and his Gulf counterparts scheduled to meet in Riyadh later on, to discuss the economic matter with International Monetary Fund chief Christine Lagarde.