Saudi Arabia, Pakistan ‘expected’ to sign deal for $2bn deposits after Eid

The deposits are crucial for the struggling economy as the federal government is desperate to seek external financing to shore up the foreign exchange reserves, which sit at a mere $4.3 billion as of April 14.

A top government official told The News that the State Bank of Pakistan would sign a deal with the Saudi Fund for Development (SFD) soon after Eid for an additional $2 billion deposit.

He 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.

Saudi Arabia had already rolled over $3 billion in deposits for one year, which matured on December 5, 2022. This $3 billion deposit is part of foreign exchange reserves of $4.43 billion, lying with the State Bank of Pakistan.

This $3 billion deposit and $1.2 billion oil facility on deferred payment were provided by the KSA in November 2021 during the tenure of the Pakistan Tehreek-e-Insaf-led government.

When Prime Minister Shehbaz Sharif visited the KSA after assuming power last year, Pakistani authorities had requested for rollover of $3 billion deposits and a $1.2 billion oil facility for one year as well as for additional deposits.

Saudi Arabia has so far provided $782.82 million in the shape of an oil facility during the first nine months (July-March) of the current fiscal year 2022-23.

The KSA has been providing approximately $100 million for procuring oil facilities on a monthly basis. The KSA also disbursed a $100 million loan in the shape of project financing during the current financial year.

Article source: https://www.suchtv.pk/pakistan/general/item/119445-saudi-arabia-pakistan-expected-to-sign-deal-for-2bn-deposits-after-eid.html