Saudi Arabia’s foreign reserves rose to the highest in 18 months after state-controlled oil producer Aramco boosted dividend payments.

Net foreign assets held by the kingdom’s central bank jumped 5% to $445bn, or 1.67tn riyals, at the end of May, the highest since November 2022, according to figures released on Sunday. That coincided with Aramco paying out more than $25bn in dividends to the government the same month, up from about $18bn a year earlier.

SAMA, as the central bank of the world’s biggest crude oil exporter is known, receives the government’s dividends from Aramco.

The country has shifted its investment strategy over the past few years. It’s now keeping a lower proportion of foreign reserves as relatively low yielding, liquid assets such as US Treasuries. Under Crown Prince Mohamed bin Salman, it’s sought bigger returns and taken on more risk both internationally and domestically, through building up the Public Investment Fund to almost $1tn.

SAMA’s reserves peaked at almost $740bn in mid-2014, shortly before a big crash in oil prices.

Aramco has been boosting shareholder payouts as it looks to use cash accumulated during 2022’s period of high oil prices and production. The company said in May that it intended to hand shareholder’s $124bn in dividends this year. The vast majority of that goes to the central government, which owns 81.5% of Aramco stock even after the latest secondary offering and transferring a 16% stake to the PIF.

Reserves are key to maintaining confidence in the kingdom’s dollar peg. Saudi officials have said that they would use a boom in petrodollar revenue in 2022 to rebuild foreign assets depleted when crude prices slumped during the Covid-19 pandemic.

Before Aramco’s 2019 initial public offering, the government changed the formula it used for getting money out of the company, in a move also intended to attract investors. Instead of monthly distributions based on higher levels of taxation and royalty on oil sales, it put in a policy of paying out $75bn a year as a so called base dividend. It later added an additional ‘performance dividend’ to further increase payouts to the government, PIF and investors.

Saudi Arabia’s stockpile can now be expected to increase sharply around the dividend schedule — and fall over the months after it in a reflection of cash flow constraints.