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The Saudi Development Fund (SDB) has announced a “generous directive” to deposit $3 billion into the State Bank of Pakistan (SBP) reserves to help the Pakistani government support its foreign exchange reserves in the face of the fallout from the Covid-19 pandemic, according to an official statement issued by the kingdom late Tuesday.
#BREAKING: #SaudiArabia deposits $3 billion in #Pakistan Central Bank to support its economy pic.twitter.com/1Dn4DAiUgl
— Saudi Gazette (@Saudi_Gazette) October 26, 2021
In addition, the kingdom has also announced financing the oil derivatives trade for a total of $1.2 billion during the year, the fund said.
“The fund indicated that these generous directives confirm the Kingdom’s continued position in supporting the economy of our sister Republic of Pakistan,” read the statement.
Development comes a day after Prime Minister Imran Khan concluded his three-day visit to Saudi Arabia.
On Monday, PM Imran met with Saudi Arabia’s Crown Prince Mohammed bin Salman on the sidelines of the Middle East Green Initiative (MGI) Summit in Riyadh and discussed bilateral ties among other matters including Afghan crisis.
Read more: PM heaps praise on Saudi Arabia’s ‘idealistic’ climate initiatives
While discussing bilateral ties, the prime minister reaffirmed Pakistan’s deep fraternal relations with Saudi Arabia and highlighted the significance Pakistan attached to its strategic ties with the kingdom.
He also expressed gratitude to Saudi Arabia for its steadfast support to Pakistan at every crucial juncture.
“The two leaders agreed to further strengthen bilateral cooperation across all fields,” read the official statement.
The latest development came only days after Islamabad and the International Monetary Fund (IMF) once again failed to reach a staff-level agreement at the scheduled time because of differences over the macroeconomic framework and deepening uncertainty over the future roadmap of the economy.
Also read: IMF seeks closure of public entities’ accounts in banks
The fresh round of talks from October 4 to 15 for the release of the $1 billion loan tranche and receiving a good economic health certificate remained inconclusive.
The talks failed despite Pakistan having implemented a prior condition of increasing electricity and petroleum products prices. However, both sides have shown resolve to remain engaged.
In October 2018, Saudi Arabia had announced a $6 billion bailout package for Pakistan’s ailing economy, which included oil supply on deferred payment worth $3 billion while $3 billion in balance of payment support.
The two friendly countries had signed agreements on the sidelines of the second edition of the annual Future Investment Initiative (FII) Conference in Riyadh. Following the agreement, Saudi Arabia deposited $3 billion in the State Bank of Pakistan to ease pressure on foreign exchange.
Read more: Govt asks IMF to relax Covid spending ceiling by $2b
Under the deferred payment facility, Saudi Arabia had committed to provide crude oil on one-year deferred payment which amounted to $3 billion. However, soon after the agreement, the two sides developed differences and Pakistan could not even use half of this facility.
This will be updated…
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