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.
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