ISLAMABAD – Finance Minister Ishaq Dar announced that the Kingdom of Saudi Arabia has made a significant deposit of $2 billion into the State Bank of Pakistan (SBP) on Tuesday. This deposit comes shortly after Islamabad reached a staff-level agreement with the International Monetary Fund (IMF) for a $3 billion Stand-By Arrangement.
During a press conference, Dar confirmed that the SBP has received the $2 billion deposit from Saudi Arabia. This inflow has contributed to the increase in the foreign exchange reserves held by the central bank, and it will be reflected in the forex reserves for the week ending July 14.
State Bank of Pakistan (SBP) has received deposit of $2 billion from the Kingdom of Saudi Arabia. This inflow has increased the forex reserves held by SBP and will accordingly be reflected in the forex reserves for the week ending 14July2023.
— Ishaq Dar (@MIshaqDar50) July 11, 2023
The timing of these inflows aligns with the signing of the short-term IMF deal on June 30. Under the standby arrangement, Pakistan is set to receive $3 billion over a period of nine months, pending approval by the IMF’s board, which is scheduled to convene on July 12.
The availability of multilateral and bilateral funds had been a major hurdle in finalizing Pakistan’s agreement with the IMF. The negotiation process had been stalled for over nine months, and the previous arrangement had expired.
The Stand-By Arrangement has provided Pakistan with some breathing space, averting a potential sovereign default, and has assisted the government in streamlining fiscal policies.
More to follow…
