ISLAMABAD: After its foreign exchange reserves reached an extremely low level, Pakistan asked Saudi Arabia on Wednesday for an urgent $3 billion financial injection.The country also expected its new army leader to play a part in securing the bailout during his imminent first visit to the Kingdom.
The proposal was made by the finance minister, Ishaq Dar, during a meeting with the Saudi envoy, Nawaf bin Said Al-Malki, according to representatives of his ministry.It was the second day in a row that the finance minister met with foreign ambassadors in an effort to enlist their financial assistance and persuade the International Monetary Fund (IMF) to change its position on releasing the country’s $1.2 billion tranche.
Dar requested a $3 billion cash rescue in addition to rolling over the prior debt by the same amount.Nevertheless, there is a pressing need for action because the nation’s foreign exchange reserves have dropped below $7 billion for the first time since January 2019.
Approximately $6.7 billion in reserves are available at the moment, which is nearly the same amount as on January 18, 2019.According to the sources, the $6.7 billion in reserves will not be sufficient to cover the $8.8 billion in principal and interest payments due between January and March of the current fiscal year.
Dar commended the ambassador for extending the duration of a $3 billion deposit by the Saudi Fund for Development in the State Bank of Pakistan (SBP) (SFD).According to Pakistan’s finance minister, in the first week of November, “assurances of a $13 billion financial package from China and Saudi Arabia, including $5.7 billion in new loans,” were given to Pakistan.
They included $8.8 billion from China and $4.2 billion from Saudi Arabia.However, during the previous month, no progress could be made; instead, two commercial loans from China, totaling $1.2 billion, were repaid.
38% of the country’s estimated gross external financing needs for the fiscal year 2022–2023 will be met by the $13 billion package.Due to the IMF’s failure to produce a significant financial package despite imposing numerous stringent requirements, its realisation could eliminate the risk of default.
Based on the sources, it was also discussed at the meeting that General Syed Asim Munir, the next Chief of Army Staff (COAS), will shortly travel to the Kingdom.After the meeting, it was revealed that the military leadership would also discuss the financial injection issue.
The news release highlighted the fact that the Saudi Arabian ambassador was informed of the continuing post-flood restoration and rehabilitation programme by the finance minister.
Both parties discussed the prospect of expanding the present $1.2 billion Saudi oil facility with deferred payments throughout the discussion.According to the officials, there were also conversations over the Saudi investment of $1 billion in Pakistan.
