Pakistan receives $ 3 billion from Saudi Arabia to help stabilize country’s economy (official)
Cash-strapped Pakistan received $ 3 billion from Saudi Arabia on Saturday as part of requested financial assistance from the Kingdom to stabilize the country’s economy, according to a senior government official.
Saudi Arabia’s financial support for Pakistan comes more than a month after Prime Minister Imran Khan’s visit to Riyadh and talks with Crown Prince Mohammad bin Salman.
As a result of the talks, Saudi Arabia agreed to provide aid amounting to $ 4.2 billion to Pakistan, of which $ 3 billion was to be transferred to deposit at Pakistan’s central bank and also to finance refined petroleum products with $ 1.2 billion during the year.
The Prime Minister’s Finance and Revenue Advisor Shaukat Tarin confirmed that the State Bank of Pakistan (SBP) had received a $ 3 billion deposit from Saudi Arabia.
“Good news, a $ 3 billion Saudi deposit received by SBP. I would like to thank His Excellency Crown Prince Mohammed Bin Salman and the Kingdom of Saudi Arabia for their kind gesture, ”the advisor tweeted.
Financial support from a $ 3 billion deposit is expected to ease pressure on the Pakistani rupee and increase foreign exchange reserves.
Last month, the Pakistani cabinet approved the deal, paving the way for the transfer of funds, which was followed by the SBP signing the deal with the Saudi Development Fund on Monday to receive the proceeds.
The aid came at a time when the Pakistani rupee hit an all-time low of 176 per dollar and is expected to raise the rupee and improve the balance of payments, which has been the government’s main concern.
In 2018, Saudi Arabia provided $ 3 billion in cash deposits and pledged a $ 3 billion oil facility to Pakistan to help its foreign exchange reserves in 2018.
However, as bilateral relations deteriorated later, Islamabad had to return $ 2 billion of the $ 3 billion in deposits.
Pakistan announced in June this year that Saudi Arabia was set to make an oil facility of $ 1.5 billion per year available.
Pakistan and the IMF signed the $ 6 billion deal in July 2019, but the program derailed in January 2020 and was briefly reinstated in March this year before derailing again in June.
From June to August, there was no serious discussion between the two parties.