Saudi government accounts were depleted by SR136bn ($36bn) during October as payments to firms working on public sector contracts resumed.

“A record SR136bn monthly fall was recorded in government accounts with Sama during October, reflecting the resumption of government payments to contractors and other service providers,” says Riyadh-based Jadwa Investment in a research note.

In mid-October the government said it would start releasing payments to contractors. Some companies were told that 30-40 per cent of their outstanding dues will be paid this year, while the remainder could be settled in 2017.

Foreign reserves also dropped. “Sama foreign reserve assets fell by $11bn in October, the third largest decline in 2016,” says Jadwa.

Deposits in Saudi banks increased by SR27.2bn, or 1.7 per cent, in October following Saudi Arabia’s $17.5bn sovereign bond issuance.

Deposits are now up 0.3 per cent since the beginning of 2016, according to the latest statistics from the Saudi Arabian Monetary Agency (Sama).

In late November, King Salman bin Abdulaziz al-Saud has approved the allocation of SR100bn from the kingdom’s reserves to the Public Investment Fund (PIF) to help it diversify its portfolio and generate alternative investments revenue streams.