RIYADH: Saudi Arabia has raised 1.87 billion US dollars in a new Islamic bond issue as the kingdom bids to finance a budget deficit resulting from low oil prices, the SPA state news agency reported on Tuesday.

The first two issues were made in April and July and were worth a total of 13.5 billion dollars. The kingdom had also issued conventional domestic and global bonds.

The kingdom has forecast a budget deficit of 53 billion dollars this fiscal year, down slightly from last year's shortfall.

Riyadh has also withdrawn more than 230 billion dollars from its fiscal reserves since the end of 2014 to finance the budget deficit. Its reserves now stand at just over 490 billion dollars.

Economic growth in Saudi Arabia is expected to hit just 0.1 percent this year, according to the International Monetary Fund.