Saudi Arabia extends period of $3 billion deposit to cash-strapped Pakistan.
State news agency SPA and Pakistan’s central bank said that Saudi Arabia on Friday extended the duration of a $3 billion deposit it made to Pakistan’s foreign reserves.
Late last year, Saudi Arabia made a loan deposit in Pakistan’s central bank to bolster the reserves of the cash-strapped nation.
As of November 25 of current year, the central bank reserves totaled $7.5 billion.
A balance of payment crisis for the South Asian economy, which must make a further $1 billion bond payment next week, has been threatened by the reserves, which are too small to cover more than a month’s worth of imports.
‘The Saudi Fund for Development (SFD) extended the period for the deposit provided by the Kingdom of Saudi Arabia to the State Bank of Pakistan in the amount of 3 billion dollars,’ the bank said in a statement.
It stated that through bolstering the reserves, the money has helped the government manage external sector problems and achieve sustained economic growth.
Pakistan has been in desperate need of external financing while it awaits the International Monetary Fund’s ninth evaluation of a $7 billion bailout package (IMF).
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