Pakistan receives $1bn from Saudi Arabia, SBP confirms

Pakistan 'desperate' for Saudi loan to shore up economy of country

KARACHI: Pakistan has received $1 billion from Saudi Arabia as part of the $3 billion pledged by the kingdom to Islamabad as balance of payment support, State Bank of Bank (SBP) spokesman Abid Qamar confirmed on Monday.

The remaining $2 billion is expected to arrive in Pakistan in the next few days, he added.

The funds from Saudi Arabia will be reflective on November 29 when SBP releases its weekly figures for foreign exchange reserves.

The development came after Prime Minister Imran Khan visited Riyadh where he attended the Future Investment Initiative conference and met with King Salman bin Abdul Aziz and Saudi Crown Prince Mohammad bin Salman.

A statement from the Prime Minister’s Office last month said Saudi Arabia had agreed to deposit $3 billion for a period of one year as a balance of payment support.

A one-year deferred payment facility for import of oil, up to $3 billion would also be provided with this arrangement being in place for three years.

“After the receipt of the amount, the country’s foreign exchange reserves have increased to more than $14 billion,” the spokesman said.

It is pertinent to mention that the central bank foreign exchange reserves had fallen to their lowest levels in four years reaching $7.5 billion, which could not meet the bill of two months’ imports.

In a statement to a local publication on Sunday, the Finance Minister Asad Umar had said the second and third tranche is expected to be received in the next two months from Saudi Arabia.

He added the oil import on deferred payments facility will mature from next month.

According to Moody’s report, the outlook for global emerging markets was (EM) “broadly stable” but warns of risks from “higher rates, politics and trade tensions”.

The report highlighted, “Although the share of (Pakistan’s) foreign currency debt is relatively low at around 35pc of total government debt, declining foreign reserves because of a current account deficit of around four to five per cent of GDP, raise repayment risks.”