According to sources acquainted with the situation, Saudi Arabia intends to extend its $3 billion deposit in aid to Pakistan in an effort to help the South Asian country bring down one of Asia’s highest inflation rates and prevent a current-account catastrophe.
This week, the Saudi Finance Ministry intends to renew its $3 billion deposit with the State Bank of Pakistan, according to persons familiar with the matter who requested anonymity to discuss internal Saudi government plans. The sources also said that the monarchy wants to offer further assistance of petroleum products worth $100 million every month for ten months.
After the guarantee from the monarchy, the sources said, Pakistan no longer needed the IMF’s loan approval at the end of the month since the country’s financing deficit had been closed. According to one source, Saudi Arabia has been working with the International Monetary Fund to guarantee complete assistance for Pakistan.
One of the persons suggested that announcing the pledge may happen in the following two days. Neither the Saudi Embassy nor the Pakistani Ministry of Finance immediately responded to requests for comment.
Before releasing further money to Pakistan, the IMF has been evaluating Saudi Arabia’s commitment to funding by providing this assistance. According to a July Bloomberg article, the IMF was concerned about a potential financial shortfall in Islamabad following the IMF loan and needed assurances that Saudi Arabia would provide as much as $4 billion in cash to Pakistan.
An enormous trade imbalance, a massive budget deficit, and a $1.7 billion debt payment are all looming for Pakistan in December. Whether or whether Saudi Arabia and other nations provide financial assistance is crucial if default is to be avoided. Without it, insolvency is looking like a plausible outcome.
Multiple times, Saudi Arabia came to the country’s aid. When then-prime minister Imran Khan visited Saudi Arabia in October, the United States promised $4. 2 billion in aid to Pakistan. There was a $1.2 billion oil derivatives trading facility and a $3 billion deposit to the State Bank of Pakistan to assist bolster reserves.
In a meeting between Pakistan’s Prime Minister Shehbaz Sharif and Saudi Arabia’s Crown Prince Mohammed bin Salman in May, the two countries discussed extending the duration of the Kingdom’s $3 billion deposit with Pakistan.
