Cash-strapped Pakistan will soon get $3 billion as loan from Saudi Arabia as the Cabinet led by Prime Minister Imran Khan has approved an agreement to keep the amount in the country's central bank, media reports said on Saturday. The Saudi government had promised to maintain a reserve of $3 billion at the State Bank of Pakistan, Geo News reported.
According to the agreement, the aid will remain in the SBP's deposit account for a year. The SBP has finalised all arrangements and now everything is in place and the amount of the agreed deposit will be received within the next couple of days, official sources told The News.
The federal Cabinet approved the agreement to keep the $3 billion aid from Saudi Arabia in the SBP, the reports quoted an official document as saying. The Cabinet approved the State Bank's retention of $3 billion from the Saudi Development Fund.
Pakistan's entire liquid foreign reserves, according to the central bank, stood at $22.773 billion as of November 19, according to Geo News. The numbers indicate that the SBP held $16.254 billion in foreign reserves, while commercial banks kept $6.519 billion in net foreign reserves.
The SBP's reserves declined by $691 million to $16.254 billion during the week ended on November 19, primarily owing to external debt repayments. According to sources, Saudi Arabia has agreed to provide $1.2 billion for the supply of refined Petroleum Oil Lubricants (POL) products, with the Economic Affairs Division (EAD) negotiating on behalf of the Pakistani government.
In response to questions, Muzammil Aslam, Spokesperson for Adviser to the Prime Minister on Finance, said Pakistan was expecting to get $7 billion from just three sources over the next 60 days. These include $3 billion in deposits from Saudi Arabia, a $1.2 billion Saudi Oil Facility with deferred payments, a $800 million Islamic Development Bank oil facility, $1 billion raised through the issuance of Sukuk bonds, and $1 billion from the IMF.All of these dollar inflows, he said, would be sufficient to alleviate pressure on existing import bills of the country.