Pakistan has finally received the $ 3 billion Saudi loan under a $ 4.2 billion Saudi program, Prime Minister’s finance and revenue adviser Shaukat Tarin confirmed on Saturday.
The Saudi Development Fund deposited the money with the State Bank of Pakistan, increasing Pakistan’s foreign exchange reserves.
âGood news, a US $ 3 billion Saudi deposit received by SBP. I would like to thank His Excellency Crown Prince Mohammed Bin Salman and the Kingdom of Saudi Arabia for this kind gesture,â Tarin said in a tweet.
Good news, a US $ 3 billion Saudi deposit received by SBP. I would like to thank His Excellency Crown Prince Mohammed Bin Salman and the Kingdom of Saudi Arabia for this kind gesture.
– Shaukat Tarin (@shaukat_tarin) December 4, 2021
Federal Information Minister Fawad Chaudhry last week said the money would flow to Pakistan within a week. The Saudi deposit will not only improve foreign exchange reserves, but also ease the pressure on the rupee against the US dollar.
In October, during Prime Minister Imran Khan’s visit to Riyadh, the Saudi government announced a $ 4.2 billion program including $ 1.2 billion of oil on a deferred payment facility.
The oil on deferred payment procedure is being finalized, SAMAA TVShakeel Ahmed said.
Saudi money comes in the form of a loan, and Pakistan will pay a relatively high interest rate.
When the federal cabinet approved the Saudi loan last month, a spokesperson for the federal finance ministry said Digital SAMAA that Pakistan secured the $ 3 billion loan from Saudi Arabia at an interest rate of 4% while the $ 1.2 billion oil deferred payment facility was guaranteed at a rate of 3.8% interest.
The loan was secured under difficult conditions. Pakistan will have to repay the money after one year. Saudi Arabia may also require a refund with three days notice.
The economic outlook is improving
Saudi money will likely improve the country’s economic outlook. The Pakistani stock market (PSX) fell sharply on Thursday with a hemorrhage of 2,100 points and 332 billion rupees following reports of a rising trade deficit and a possible hike in the policy rate.
After the market turmoil on Thursday, analysts predicted that Saudi Arabia’s deposit and the $ 1 billion IMF loan tranche would bring back stability.