PM Imran thanks Saudi Arabia after $3-billion financial assistance

Prime Minister Imran Khan on Wednesday thanked the Kingdom of Saudi Arabia (KSA) for providing $3 billion in support to Pakistan.

“I want to thank HRH Prince Mohammad bin Salman for supporting Pakistan with $3 billion as deposit in Pakistan's central bank and financing refined petroleum product with $1.2 billion,” tweeted the prime minister.

The prime minister said KSA has always been there for Pakistan “in our difficult times including now when the world confronts rising commodity prices.”

In a late-night development, the Saudi Fund for Development (SFD) announced the issuance of the Royal Directive to deposit an amount worth $3 billion into the central bank of Pakistan, “to help the Pakistani government support its foreign currency reserves and support it in facing the impacts of the coronavirus pandemic,” read a statement by the Saudi Press Agency (SPA).

In addition, the SFD said that the royal directive was also issued to finance the oil derivatives trade with a total amount of $1.2 billion throughout the year.

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“It pointed out that these royal directives confirm the Kingdom of Saudi Arabia's ongoing stance in supporting the economy of the sisterly Republic of Pakistan,” the statement read.

The announcement came just hours after Khan returned from his three-day visit to KSA, to attend the launch of the Middle East Green Initiative (MGI) Summit held in Riyadh.

Khan visited the kingdom at the invitation of Crown Prince Mohammad bin Salman bin Abdul Aziz. Besides attending the summit, he also participated in the Pakistan-Saudi Investment Forum and met the Saudi leadership.

Federal Minister for Energy Hammad Azhar also tweeted about the financial support from KSA, saying it “will help ease pressures on our trade and forex accounts as a result of global commodities price surge.”

The financial support is a major boost to Pakistan currently in negotiations with the International Monetary Fund (IMF) to obtain a $1-billion tranche under the Extended Fund Facility (EFF).

Earlier, Business Recorder reported that an IMF condition for the successful conclusion of the ongoing sixth review talks with Pakistan authorities is the rollover of debt from friendly countries, including $1 billion from Saudi Arabia.

The report said that the presence of Advisor to Prime Minister on Finance and Revenue Shaukat Tarin in Riyadh may be seen in the context of securing the rollover of the $1-billion debt and exploring the possibility of oil on deferred payment which would reduce pressure on the balance of payment position.