Pakistan, KSA may sign deal for $2bn deposits after Eid

ISLAMABAD: Pakistani authorities Saturday hoped that Islamabad would sign a deal for additional deposits of $2 billion from the Kingdom of Saudi Arabia (KSA) after Eidul Fitr. 

A top government official told this correspondent that the State Bank of Pakistan would sign a deal with the Saudi Fund for Development (SFD) soon after Eid for an additional $2 billion deposit. He added the KSA had confirmed bilateral assistance support, which was also acknowledged by the Fund staff. This agreement is the follow-up on the confirmation of additional financial support of $2 billion and $1 billion from KSA and the UAE, he added.

Official sources clarified that Pakistan neither made any fresh request for more support from the KSA nor the UAE, except for the already confirmed $2 billion and $1 billion by these countries, respectively. Saudi Arabia had already rolled over $3 billion in deposits for one year, which got matured on December 5, 2022. This $3 billion deposit is part of foreign exchange reserves of $4.43 billion lying with the State Bank of Pakistan.

This $3 billion deposit and $1.2 billion oil facility on deferred payment were provided by the KSA in November 2021 during the tenure of PTI-led government. When the incumbent Prime Minister Shehbaz Sharif visited the KSA after assuming power last year, Pakistani authorities had requested for rollover of $3 billion deposits and a $1.2 billion oil facility for one year as well as for additional deposits.

The Kingdom of Saudi Arabia (KSA) has so far provided $782.82 million in the shape of an oil facility during the first nine months (July-March) period of the current fiscal year 2022-23. The KSA has been providing approximately $100 million for procuring oil facilities on a monthly basis. The KSA also disbursed a $100 million loan in the shape of project financing during the current financial year.

Despite confirmation of $3 billion from the KSA and the UAE, the IMF has been asking Islamabad to manage more external dollar inflows for moving towards a staff-level agreement.