Debt-ridden Pakistan to get $3bn from Saudi Arabia; in Central Bank's deposit for 1 year

Cash-strapped Pakistan bread a sigh of relief on Saturday after Imran Khan-led cabinet approved an agreement that would pave way for a USD 3 billion loan from Saudi Arabia.  Saudi government h previously promised to maintain a reserve of USD 3 billion at State Bank of Pakistan (SBP), Geo News reported. With  federal Cabinet approving agreement,  aid will be sent by Saudi in coming days and remain in SBP’s deposit account for a year.

“ SBP has finalised all arrangements and w everything is in place and amount of agreed deposit will be received within next couple of days,” official sources told News.

Saudi Arabia's USD 3 billion loan is t all. According to Muzammil Aslam, Spokesperson for viser to Prime Minister on Finance, Pakistan is expecting USD 7 billion over next 60 days. se include USD 3 billion in deposits from Saudi Arabia, a USD 1.2 billion Saudi Oil Facility with deferred payments, a USD 800 million Islamic Development Bank oil facility, USD 1 billion raised through issuance of Sukuk bonds, and USD 1 billion from International Monetary Fund (IMF).

Pakistan's debt crisis worsens

Pakistan's ecomy has become crippled under its mounting debts and loans from international organisations and friendly nations. In March 2021,  World Bank signed agreements with Islamab to provide a loan of USD 1.336 billion, just days after International Monetary Fund (IMF) agreed to release a tranche of USD 500 million loan. 

Apart from world organisations, Pakistan has also been regularly borrowing from United Arab Emirates (UAE) which earlier this year demanded its USD 1 billion back from debt-ridden ecomy. Last year, Pakistan h mand to pay back part of a loan secured from Saudi Arabia after its all-wear friend - China - came to Imran Khan's rescue. A report by Pakistan's Ministry of Finance information revealed that Saudi Arabia provided neighbouring country a $6.2 billion financial pack for three years in 2018 which Saudi claimed back "ahe" of its schedule. Pakistan h repaid loan to Saudi after taking a loan of same amount from China.

Its regular borrowings from China have, in turn, mounted its account. According to annual financial statement that was released by State Bank of Pakistan (SBP), Pakistan has h to pay over Rs 26 billion in interest cost to China to repay a maturing debt in fiscal year 2020-21. Reportedly, cash-strapped nation is also facing scores of "hidden debts" totalling $385 billion due to China's Belt and Ro Initiative (BRI) project. 

(With ncy Inputs)

Im: AP