Saudi Arabia deposits $3bn in Pakistan's central bank

Support package will help ease pressure on forex reserves

02:37 PM | 4 Dec, 2021
Saudi Arabia deposits $3bn in Pakistan's central bank

KARACHI – Saudi Arabia has deposited $3 billion in Pakistan's foreign reserves for one year at 4% interest under a support package, Adviser to the Prime Minister on Finance Shaukat Tarin confirmed Saturday.

The grant is a major relief for the South Asian country which is suffering from economic challenges with sliding foreign reserves, a widening current account deficit, a depreciating currency, and high inflation.

“Good news, US$3 billion Saudi deposit received by SBP,” PM’s aide said on Twitter, thanking Saudi Crown Prince Mohammed Bin Salman and the kingdom for the kind gesture.

Earlier, the State Bank of Pakistan signed an agreement with the Saudi Fund for Development (SFD) to receive $3 billion to shore up its depleting foreign exchange reserves.

A statement issued by the central bank on Monday cited “Under this deposit agreement, SFD shall place a deposit of USD 3 billion with SBP. The deposit amount under the agreement shall become part of SBP’s Foreign Exchange Reserves.”

The Saudi support package also includes a $1.2 billion oil loan facility. It was agreed during Prime Minister Imran Khan’s visit to the Kingdom of Saudi Arabia last month.

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The development come a week after the International Monetary Fund (IMF) agreed with Islamabad on measures needed to revive a stalled $6 billion funding programme.