Saudi Arabia extends $3 bln deposit term to cash-strapped Pakistan

Saudi Arabia on Friday prolonged the time period of a $3 billion deposit it made to Pakistan’s international reserves, state information company SPA and Pakistan’s central financial institution mentioned.

Saudi Arabia deposited the cash in Pakistan’s central financial institution late final yr as a mortgage to shore up the cash-strapped nation’s reserves.

The central financial institution reserves stood at $7.5 billion as of Nov 25 this yr.

Too low to cowl greater than a month of imports, the reserves along with a widening present account deficit have threatened a steadiness of cost crises for the South Asian economic system, which has to make one other $1 billion bond cost subsequent week.

“Saudi Fund for Improvement (SFD) prolonged the time period for the deposit offered by the Kingdom of Saudi Arabia within the quantity of three billion {dollars} to the State Financial institution of Pakistan,” the financial institution mentioned in an announcement.

By shoring up the reserves, it added, the cash has contributed to assembly exterior sector challenges and obtain sustainable financial progress for the nation.

Pakistan has been in dire want of exterior financing because it waits for the ninth assessment of a $7 billion bailout bundle by the International Monetary Fund (IMF).

Pakistan’s finance ministry additionally authorized the signing of a debt rescheduling of $26.150 million with Japan Financial institution for Worldwide Cooperation below G-20 debt servicing initiative to mitigate COVID-19 losses.

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