Pakistan moved one step closer to receiving a $3 billion deposit from Saudi Arabia on Monday when the two countries signed a deposit agreement to pave the way for financial assistance.
The agreement was signed on Monday by Saudi Fund for Development (SFD) Chief Executive Officer Sultan Bin Abdul Rahman Al-Marshad and State Bank of Pakistan (SBP) Governor Dr. Reza Baqir, according to a statement released by the SBP. SDF would deposit $3 billion with the State Bank of Pakistan under the terms of the agreement.
“The amount of the deposit will be added to the central bank’s foreign exchange reserves.” It will help to support Pakistan’s foreign currency reserves and contribute to the resolution of the COVID-19 pandemic’s negative effects,” according to the statement. According to the SBP, the deposit agreement reflects the Kingdom of Saudi Arabia and Pakistan’s strong and special relationship, and it is expected to strengthen economic ties between the two brotherly countries, according to a media report.
On October 27, Saudi Arabia agreed to provide $3 billion in cash assistance to Pakistan, as well as a $1.2 billion oil facility with deferred payment. It is the kingdom’s second financial assistance package to Pakistan in the last three years, with the goal of assisting the country in dealing with a looming external sector crisis.
In October 2018, the kingdom extended a similar package worth $6 billion to Pakistan in order to give the country some breathing room before approaching the International Monetary Fund for an extended loan facility.
Meanwhile, Shaukat Tarin, Advisor to the Prime Minister on Finance, met with Prime Minister Imran Khan on Monday and briefed him on the Saudi financial assistance as well as the oil facility on deferred payments.
The Prime Minister was also updated on the status of revenue receipts, according to APP.
