Saudi Arabia considers providing much-needed financial help to Pakistan
Last updated on: 10 January,2023 10:57 am
Saudi Arabia considers providing much-needed financial help to Pakistan
RIYADH – Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz Al Saud has directed to conduct a study to increase the amount of the deposit it made to the Pakistan’s forex reserves to $5 billion as the South Asian country is currently facing economic woes.
Earlier, the kingdom has parked $3 billion in the State Bank of Pakistan (SBP). In December last, it extended the term of the deposit for further three years, helping the country tackle economic fallout of the devastating floods and financial challenges.
Despite the assistance from the brotherly country, the forex reserves of Pakistan continued to deplete due to debt servicing. Earlier this month, the fx reserves held by the central bank plunged to nearly a decade low of $4.5 billion after repayment of $1.2 billion loan to the UAE banks. The reserves held by the commercial banks are standing at $6 billion.
In order to save the country from defaulting on international liabilities, the coalition government is reaching out to the friendly states and the International Monetary Fund (IMF).
The announcement from the Saudi crown prince to consider increasing the Kingdom’s deposit in the SBP comes after the recent visit of the Pakistan Army Chief Gen Asim Munir.
Prince Mohammad bin Salman has directed to study augmenting the kingdom investments in Pakistan which have previously been announced on August 25, 2022 to reach $10 billion.
He also “directed the Saudi Development Fund (SDF) to study increasing the amount of the deposit provided by the Kingdom of Saudi Arabia in favor of the Central Bank of Pakistan (CBP) which have previously been extended on December 2, 2022 to hit a $5billion ceiling, confirming the Kingdom s position supportive to the economy of the Islamic Republic of Pakistan and its sisterly people”.
The state-run Saudi Arabia’s SPA said the development “came within the framework of the existing communication between HRH the Crown Prince and Muhammad Shehbaz Sharif, Prime Minister of Pakistan”