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Pakistan is set to sign a contract with the Kingdom of Saudi Arabia (KSA) for $2 billion in additonal deposits after Eidul Fitr, it emerged on Saturday.
The ‘cash-strapped’ country is frantically looking for deposits to protect its dwindling foreign exchange reserves and bolster its shaky economy. The nation’s foreign exchange holdings were only $4.3 billion as of April 14, 2023.
According to media reports the State Bank of Pakistan (SBP) would sign a deal with the Saudi Fund for Development (SFD) soon after Eid for an additional $2 billion deposit.
The ministry of finance official added the KSA had confirmed bilateral assistance support to the International Monetary Fund (IMF), which was also acknowledged by the lender’s staff.
This agreement is the follow-up on the confirmation of additional financial support of $2 billion and $1 billion from KSA and the UAE, he added.
Official sources clarified that Pakistan neither made any fresh request for more support from the KSA nor the UAE, except for the already confirmed $2 billion and $1 billion by these countries, respectively.
They said the kingdom had confirmed bilateral assistance support to the International Monetary Fund (IMF), which was also acknowledged by the lender’s staff. This agreement is the follow-up on the confirmation of additional financial support of $2bn and $1bn from KSA and the UAE, he added.
Saudi Arabia has already rolled over $3bn in deposits for one year, which matured on December 5, 2022. Part of the $4.43 billion in foreign exchange reserves held by the State Bank of Pakistan includes this $3 billion deposit.
This $3bn deposit and $1.2bn oil facility on deferred payment were provided by the KSA in November 2021 during the tenure of the PTI government.
Pakistan moved one step closer to the revival of the crucial bailout package of the International Monetary Fund (IMF) as Saudi Arabia has provided assurance for $2 billion in additional deposits to the global lender.