Last week’s sale of $ 17.5 billion worth of sovereign bonds by Saudi Arabia, a record for an emerging market, was no ordinary affair. This has, not surprisingly, had consequences for the kingdom, most of whose revenues come from oil. Consequently, at next month’s OPEC meeting Saudi Arabia is likely to accept output cuts, even though these cuts may not apply to its arch-rival Iran. Second, oil prices have increased since the beginning of the year and are in the region of $50 a barrel. Longer-term risks remain for the kingdom, notwithstanding the markets’ response to its bonds.

Source: The Hindu October 23, 2016 18:56 UTC