‘Special relationship’ – Saudi Arabia, Pakistan sign $3 billion deposit agreement

06:50 PM | 29 Nov, 2021
‘Special relationship’ – Saudi Arabia, Pakistan sign $3 billion deposit agreement

KARACHI – The State Bank of Pakistan (SBP) and Saudi Fund for Development (SFD) on Monday signed a deposit agreement for the funds worth $3 billion that would bring a sigh of relief for cash-strapped South Asian country.

Chief Executive Officer of SFD Sultan Bin AbdulRahman Al-Marshad and the Governor SBP Dr. Reza Baqir signed the agreement in Karachi.

Under this deposit agreement, SFD shall place a deposit of USD 3.0 billion with SBP. The deposit amount under the agreement shall become part of SBP’s Foreign Exchange Reserves.

It will help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the COVID19 pandemic.

The deposit agreement reflects the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and will further augment the economic ties between the two brotherly countries, said an official statement.  

Last month, SDF agreed to deposit $3 billion in the SBP to help support its declining foreign reserves. The fund had stated that an official directive was issued to supply $1.2 billion to finance Pakistan’s oil products trade during the year.

Saudi Arabia, according to reports, will charge around 3.2 to 3.5% markup on annual basis for this deposit amount.

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