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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