Pakistan gets $8 billion in financial support from Saudi Arabia

Tags: International News

Saudi Arabia has agreed to provide a relief package of about 8 billion US dollars to Pakistan.

• This package is expected to give a big help to Pakistan in recovering its dwindling foreign exchange reserves and troubled economy.

• At present, Pakistan is beset with serious financial challenges due to high rate of inflation, dwindling foreign exchange reserves, severe current account deficit and weakening of its currency.

• The agreement was signed during the visit of Pakistan Prime Minister Shahbaz Sharif to Saudi Arabia.

• It provides for funding for oil, additional funds through deposits or succulents, and advances of $4.2 billion in facilities.

• Pakistan had proposed to increase the funding for oil from $ 1.2 billion to $ 2.4 billion, which Saudi Arabia accepted.

• It was also agreed that the existing deposits of $3 billion would be rolled over for an extended period up to June 2023.

• Other Financial support of UAE to Pakistan

• Saudi Arabia provided a $3 billion deposit to the State Bank of Pakistan in December 2021.

• The Saudi oil facility became operational in March 2022, receiving $100 million for Pakistan to purchase oil.

• This oil-rich Gulf country had given a package of $ 7.5 billion to Pakistan during the last term of the PML-N government (2013-18).

• In the PTI-led government headed by former prime minister Imran Khan, Saudi Arabia provided a $4.2 billion package, including a $3 billion deposit and a $1.2 billion oil facility for one year, and linked it to the IMF program

• Pakistan’s foreign exchange reserves have depleted by $6 billion in the last six to seven weeks and nosedived to $10.5 billion.

• Pakistan needs financial assistance of $ 9-12 billion by June 2022 to prevent depletion of foreign exchange reserves.