ISLAMABAD: Pakistan is set to sign an agreement for additional deposits of $2 billion from Saudi Arabia after Eid ul Fitr, according to Pakistani authorities.
The deposits are important for the struggling economy, as the government seeks external financing to shore up foreign exchange reserves that sit at a mere $4.3 billion as of April 14.
A top government official told a Pakistani newspaper that the State Bank of Pakistan (SBP) would sign an agreement with the Saudi Fund for Development (SFD) soon after Eid ul Fitr for an additional $2 billion deposit.
He added that Saudi Arabia had confirmed bilateral assistance support to IMF, which was also acknowledged by the lender’s staff.
This deal is the follow-up on the confirmation of additional financial assistance of $2 billion and $1 billion from KSA and the UAE, respectively, as reported by the newspaper quoting a government official.
The newspaper reported that official sources clarified that Pakistan had not made any fresh requests for more support from the KSA or the UAE, except for the already confirmed $2 billion and $1 billion, respectively.
Saudi Arabia renews its $3 billion deposit
Saudi Arabia had renewed its $3 billion deposit, which matured on December 5, 2022, for another year. This deposit is part of Pakistan’s foreign exchange reserves of $4.43 billion held by the State Bank of Pakistan.
The deposit was initially made in November 2021 when the Pakistan Tehreek-e-Insaf-led government was in power and also included a $1.2 billion oil facility on deferred payment. During Prime Minister Shehbaz Sharif’s visit to Saudi Arabia, Pakistani authorities had requested the rollover of the $3 billion deposit, a $1.2 billion oil facility, and additional deposits.
Saudi Arabia has already disbursed $782.82 million in the form of an oil facility during the first nine months of the current fiscal year 2022-23, with approximately $100 million provided monthly.
Additionally, Saudi Arabia provided a $100 million loan in the form of project financing during the current financial year.
The additional $2 billion deposit from the KSA will be a significant boost for Pakistan’s struggling economy, helping to shore up foreign exchange reserves and providing much-needed support for the country’s financial stability.
