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Tuesday January 31, 2023

Saudi Arabia ready to invest more in Pakistan amid currency crisis

Saudi Crown Prince Mohammad Bin Salman instructs studying investment increase to reach $10b, deposits to $5b

January 10, 2023
Prime Minister Shehbaz Sharif (left) in a meeting with Saudi Crown Prince Mohammad Bin Salman. — SPA/File
Prime Minister Shehbaz Sharif (left) in a meeting with Saudi Crown Prince Mohammad Bin Salman. — SPA/File 

Saudi Arabia is willing to invest more in Pakistan with Crown Prince Mohammad Bin Salman on Tuesday directing the authorities to study augmenting the country's investments in Pakistan to reach $10 billion, giving a major boost to Pakistan’s efforts to stabilise its deteriorating economy.

Riyadh's investments in Pakistan had previously been announced on August 25, 2022.

As per a report published by the Saudi Press Agency, the Saudi leader also directed Saudi Fund for Development (SFD) to consider increasing the amount of deposits by $2 billion to reach $5 billion, confirming the Kingdom's position supportive to Pakistan’s economy and its people amid the worsening currency crisis.

Last month, the Saudi fund extended its term for the $3 billion deposit in the State Bank of Pakistan (SBP) which was set to mature on December 5.

The SBP had signed an agreement with the SFD in November 2022 to receive $3billion, to be placed in the central bank’s account with an aim to improve its foreign exchange reserves.

Saudi Arabia's state broadcaster reported that the crown prince issued directives to mull an increase in the amount of the deposit which was previously extended on December 2, 2022 to hit a $5 billion ceiling.

“This came within the framework of the existing communication between HRH the Crown Prince and Muhammad Shehbaz Sharif, Prime Minister of Pakistan,” the SPA added.

The announcement comes a day after Chief of Army Staff General Asim Munir’s meeting with the crown prince during his first overseas official visit to the country.

Pakistan is facing a currency crisis due to dwindling forex reserves which have slumped to $4.5 billion — enough for three weeks of imports.

On the other hand, Islamabad is making hectic efforts to revive the International Monetary Fund’s (IMF) loan programme stalled for months.

A Pakistani delegation held a meeting with the IMF officials in Geneva on Monday at the sidelines of the donors’ conference and reiterated its commitment to completing the programme.

Finance Minister Muhammad Ishaq Dar and IMF officials "discussed challenges to regional economies in the wake of climate change," according to a finance ministry statement following the meeting's conclusion.

"[The] finance minister reiterated the commitment to complete the Fund programme," it added.

The lender is yet to approve the release of $1.1 billion originally due to be disbursed in November last year, leaving Pakistan with only enough foreign exchange reserves to cover one month's imports.