Saudi Arabia has agreed to provide US$ 4.2 billion worth of assistance to cash-strapped Pakistan to support its economy, it emerged on Wednesday after Prime Minister Imran Khan held talks with Saudi Prince Mohammad bin Salman in Riyadh this week.
IMAGE: Pakistan Prime Minister Imran Khan welcomed by Saudi Arabia’s Crown Prince Mohammed bin Salman in Jeddah, September 19, 2019. Photograph: Bandar Algaloud/Reuters
Information Minister Fawad Chaudhry took to Twitter to announce the assistance which came just two days after Khan paid a three-day visit to the Gulf kingdom.
“Saudi Arabia’s announcement supports Pakistan with 3 billion US dollars as deposit in Pakistan central bank and also financing refined petroleum products with 1.2 billion US dollars during the year,” he said in a tweet.
Prime Minister Khan thanked Prince Salman for the generous aid when Pakistan’s economy was facing difficulties.
“I want to thank HRH Prince Mohammad bin Salman for supporting Pak with $3 bn as deposit in Pak’s central bank & financing refined petroleum product with $1.2 bn. KSA has always been there for Pak in our difficult times incl now when world confronts rising commodity prices (sic),” he said on Twitter.
In 2018, Saudi Arabia had provided US$ 3 billion in cash deposits and promised a US$ 3 billion oil facility to Pakistan to help its foreign exchange reserves in 2018.
However, as the bilateral relations deteriorated later, Islamabad had to return US$ 2 billion of the US$ 3 billion deposits.
Pakistan announced in June this year that Saudi Arabia was about to make available US$ 1.5 billion oil facility per annum.
Now it has provided direct disposition assistance along with oil facilities after the visit of Khan.
A formal announcement about the agreement would be made by Prime Minister’s adviser on finance and revenue Shaukat Tarin and Energy Minister Hammad Azhar, Dawn newspaper reported.
The Saudi government would immediately deposit US$ 3 billion in Pakistan’s account for a year and keep it rolling at least until the completion of the International Monetary Fund (IMF) programme in October 2023, the report quoted an official as saying.
Pakistan and the IMF had signed the US$ 6 billion deal in July 2019 but the programme was derailed in January 2020 and restored briefly in March this year before again going off the track in June.
From June to August there were no serious discussions between the two sides.
In addition, the Saudi government would provide crude oil to Islamabad on deferred payments worth up to US$ 1.5 billion per annum, the report said.