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Saudi Arabia has agreed to provide USD 4.2 billion worth of assistance to cash-strapped Pakistan to support its economy, it emerged on Wednesday after Prime Minister Imran Khan held talks with Saudi Crown Prince Mohammad bin Salman in Riyadh this week.
Information Minister Fawad Chaudhry took to Twitter to announce the assistance which came just two days after Khan paid a three-day visit to the Gulf kingdom.
Saudi Arabia's announcement supports Pakistan with 3 billion US dollars as deposit in Pakistan central bank and also financing refined petroleum products with 1.2 billion US dollars during the year, he said in a tweet.
Prime Minister Khan thanked Crown Prince Salman for the generous aid when Pakistan's economy was facing difficulties.
I want to thank HRH Prince Mohammad bin Salman for supporting Pak with $3 bn as deposit in Pak's central bank & financing refined petroleum product with $1.2 bn. KSA has always been there for Pak in our difficult times incl now when world confronts rising commodity prices (sic), he said on Twitter.
Prime Minister's Adviser on Finance Shaukat Tarin, addressing a press conference, said that the Saudi financial support package of USD 4.2 billion was for one year and would prove to be useful to lift pressure on the Pakistani rupee.
He said that during talks in Saudi Arabia, Crown Prince Salman expressed his happiness to extend the support to Pakistan, saying Pakistan holds a special place for the Kingdom.
Tarin stated that the Saudi package had no connection with the IMF programme, which he said would be revived.
The Pakistani currency has depreciated around 13.6 per cent since May and it is said that smuggling of dollars to neighbouring Afghanistan was the main reason for it.
In 2018, Saudi Arabia had provided USD 3 billion in cash deposits and promised a USD 3 billion oil facility to Pakistan to help its foreign exchange reserves in 2018.
However, as the bilateral relations deteriorated later, Islamabad had to return USD 2 billion of the USD 3 billion deposits.
Pakistan announced in June this year that Saudi Arabia was about to make available USD 1.5 billion oil facility per annum.
Now it has provided direct disposition assistance along with oil facilities after the visit of Khan.
The Saudi government would immediately deposit USD 3 billion in Pakistan's account for a year and keep it rolling at least until the completion of the International Monetary Fund (IMF) programme in October 2023, Dawn newspaper said.
Pakistan and the IMF had signed the USD 6 billion deal in July 2019 but the programme was derailed in January 2020 and restored briefly in March this year before again going off the track in June.
From June to August there were no serious discussions between the two sides.
In addition, the Saudi government would provide crude oil to Islamabad on deferred payments worth up to USD 1.5 billion per annum, the report said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
