Saudi Arabia is preparing to launch its first sovereign wealth fund to manage budget surpluses from a rise in crude prices estimated at hundreds of billions of dollars, said a media report.

The central bank has managed investment of the kingdom's foreign currency reserves until now, much of it in US Treasury bonds, reported the Gulf Daily News, our sister publication, citing the Saudi news agency SPA.

The Shura Council is due to discuss a draft law for the National Reserve Fund on Monday and Tuesday, the report added.

The report gave no indication of whether any change in investment strategy was envisioned.

The fund will be tasked with investing state reserves to "assure the kingdom's financial stability," Saad Mareq from the Shura Council financial affairs committee told Saudi daily Asharq Al Awsat.

The newspaper said the fund will start with capital representing 30 per cent of budgetary surpluses accumulated over the years in the kingdom, the world's largest exporter of crude oil.

Riyadh has built up significant foreign currency reserves because of rises in the price of crude oil on the international market.

There are no official figures available, but financial experts estimate its combined assets at around $700 billion.

In the past three years alone, the kingdom has announced budget surpluses totalling some $232 billion.-TradeArabia News Service