- Also intends to provide $100mn a month for 10 months in petroleum products that would be granted as additional support
Saudi Arabia plans to renew its $3-billion deposit in assistance to Pakistan, while also intending to provide $100 million per month for 10 months in petroleum products that would be granted as additional support, reported Bloomberg on Saturday.
The Saudi Ministry of Finance plans to renew its $3 billion deposit with the State Bank of Pakistan (SBP) as soon as this week, the report added, citing people familiar with the matter.
The additional support would mean Pakistan’s funding gap, as the International Monetary Fund (IMF) calls it, has been covered after Saudi Arabia’s commitment.
The assurance will pave way for the IMF board’s approval at the end of the month.
Saudi Arabia has been coordinating with the IMF to ensure that Pakistan is fully supported, Bloomberg quoted one of the people as saying. The commitment can be announced within the next two days, said one of the people.
Representatives for Saudi Arabia and Pakistan’s Finance Ministry did not immediately respond to messages seeking comment.
It was reported earlier that the IMF has been looking to assess Saudi Arabia’s commitment to financing Pakistan before the multilateral lender disburses fresh funds to the South Asian country.
The IMF board approval also hinged on other ‘friendly countries’ extending their support with the UAE announcing its plans of investing $1 billion earlier this month as well.
The developments come at a critical time for Pakistan that has seen its foreign exchange reserves plummet to under $8 billion, and the rupee hit an all-time low last month.
However, the currency has strengthened over the past two weeks after the IMF said that with the increase in petroleum development levy (PDL), Pakistan has completed the last prior action for the combined seventh and eighth review, adding that the board meeting is tentatively planned for late August once adequate financing assurances are confirmed.