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Are Foreign Securities A Safe Haven For A Rentier Economy? An Acceptability Framework from Surveys' Perspectives

Journal: International Journal of Economics and Financial Research (Vol.5, No. 10)

Publication Date:

Authors : ;

Page : 227-237

Keywords : Safe haven; Rentier economy; Foreign securities; Fixed-income instruments; Uncertainty; Reserves; And foreign portfolio investment (FPI);

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Toward answering a complicated question of considering financial low-risk and fixed income instruments a safe haven for rentier economies, this study investigates the perspectives and perceptions of policy makers and non- policy makers of a rentier economy of Saudi Arabia, the largest oil producer, towards investing its financial reserves, initially, in the financial sector and, particularly fixed-income securities. Furthermore, the study explores experts' views in regard to the optimal alternative to the investment in an financial sector. The outcomes of this research methods: interview and questionnaire, show that, despite the uncertainty and instability featured the present financial investment scene, manifested by the current economic slowdown and financial crisis: balance sheet recession, market crunches and banking collapse in different parts of the world, the majority of the participants, trusted the financial sector as a shelter for the reserves of Saudi Arabia. They believed that government bonds and T-bills are the most secure financial instruments to invest the accumulated revenues from oil returns. Thus, from the participants responses, the financial investment sector represents the acceptability framework that can be a safe channel to maximize income for the national economy.

Last modified: 2019-10-18 15:19:13