Prime Minister Imran Khan accompanies Saudi Arabia’s Crown Prince Mohammed bin Salman on a carriage to the President House in Islamabad, Pakistan on February 18, 2019.
- China provided Pakistan a $1b commercial loan to repay the Saudi debt
- Third tranche of Saudi loan to be repaid in January, 2021
- Saudi Arabia gave Pakistan a $3 billion loan and a $3.2 billion oil credit facility in late 2018
ISLAMABAD: Pakistan has repaid $1 billion to the Kingdom of Saudi Arabia on Wednesday as a second instalment of a $3 billion soft loan after Beijing agreed to provide a $1 billion financing line to Islamabad, sources confirmed on Thursday.
This is the second time China has come to Pakistan’s rescue to repay the Saudi debt. Earlier this year, Islamabad repaid $1 billion to KSA in the first quarter of the current fiscal year. With the latest repayment, Pakistan has so far repaid $2 billion out of the total $3 billion debt. Islamabad had paid mark up of over 3% on SAFE deposit.
China helped Pakistan through difficult times, says PM Imran
Saudi Arabia gave Pakistan a $3 billion loan and a $3.2 billion oil credit facility in late 2018.
The money had been deposited in State Bank of Pakistan on December 15 2018 with a three years maturity period. Islamabad is repaying the amount ahead of schedule.
The last tranche of $1 billion will be repaid next month.
China bails out Pakistan to repay $1b Saudi debt
With the new facility, Pakistan’s reliance on China increases. The country’s financial account has already turned negative to the tune of $1.33 billion because of an outflow of dollars.
So far, increased remittances helped Islamabad avoid an eruption of a full fledged balance of payments crisis as remittances from abroad remained over $2 billion in the last five months.