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Sunday, April 14, 2024

Saudi Arabia announces financial support for Pakistan

Saudi Arabia has agreed to provide Pakistan $3 billion in foreign currency support for a year to address its balance-of-payments crisis, the government announced. The Kingdom has also agreed to provide Islamabad a one-year deferred payment facility for the import of oil, worth up to another $3 billion.

Advisor to Finance Minister on Finance and Revenue, Shaukat Tarin said Wednesday that Saudi Arabia has indicated to place US$3 billion with State Bank of Pakistan and offer a $1.2 billion deferred oil facility to help Pakistan in the balance of payment.

In a tweet, Tarin said the Finance Minister of Saudi Arabia informed him about this generous gesture of the Kingdom of Saudi Arabia.

The minister in a tweet thanked the Crown Prince and the Kingdom of Saudi Arabia for this kind gesture.

Read more: Saudi Arabia to pay Pakistan $3.6bn for oil purchases


Back in May, the federal minister for information Fawad Chaudhry had said Saudi Arabia had agreed, in principle, to revive the facility of oil supply to Pakistan on deferred payments.

Finance minister Shaukat Tarin had repeated earlier this month that Saudi Arabia had agreed to provide oil on deferred payment to Pakistan.

During the visit, Prime Minister Khan held “detailed bilateral discussions” with the Saudi monarch and Crown Prince Mohammed bin Salman, a foreign ministry handout said.

Read more: Saudi Arabia considers buying Israeli missile-defense systems

Prince Mohammed agreed to the premier’s suggestion for reduction of Saudi visa fee for Pakistani workers, “which is a significant step towards enhancing Pakistan’s workforce in [the Kingdom], as well as facilitating travel of people from both countries”.

Earlier, Saudi Arabia had provided a USD 6 billion financial package, including $3 billion deposits into the State Bank of Pakistan and the remaining $3 billion for oil facility on deferred payment on an annual basis.

During his address at the investment conference in Riyadh, Prime Minister Khan had confirmed that Pakistan was also in talks with the International Monetary Fund (IMF) over a bailout.

However, Khan has in recent days sought to avoid going to the IMF and still wants to at least reduce the size of any bailout by appealing to “friendly countries” for bilateral financial support.

The prime minister’s attendance at the FII comes as leading policy-makers and corporate chiefs shunned the conference in response to the death of journalist and Saudi government critic Jamal Khashoggi at the Kingdom’s consulate in Istanbul — a scandal that has tipped Riyadh into a diplomatic crisis.

Read more: Understanding Saudi Arabia and Israel’s reaction over Taliban’s takeover

The Saudi pledge comes days after the State Bank warned inflation could double in the coming year — hitting 7.5 percent — while the country’s growth target rate of 6.2pc would likely be missed.

APP with additional inputs from GVS News Desk