By Staff Reporter
ISLAMABAD: Pakistan will likely secure an additional multibillion-dollar financial support package from long-time ally Saudi Arabia ‘within days’ to shore up its foreign currency reserves, the finance minister said on Wednesday.
The country has faced growing economic challenges with sliding foreign reserves, a widening current account deficit, a depreciating currency, and high inflation.
Central bank’s foreign reserves have fallen to as low as $5.82 billion, barely enough to cover a month of imports.
Pakistan is in dire need of funds to cover its current account deficit and debt obligations, for which it needs more than $30 billion in external financing this financial year.
Expected funds from the IMF have been delayed as the programme’s ninth review is yet to formally begin.
“I am hopeful that Saudi Arabia will beef up its deposits in a matter of days, not weeks,” minister Ishaq Dar told a news conference in Islamabad.
Pakistan is seeking an additional $4.2 billion from Saudi Arabia, which includes a $1.2 billion oil loan facility. The Kingdom, China, and the United Arab Emirates have already parked funds in Pakistan’s central bank to help Islamabad.
The minister said China was also in the process of rolling over its $1.2 billion deposit in the country’s central bank, though its system required “Pakistan to return the money” before it could be handed back to Islamabad.
“Once the facility is renewed and it is paid back, it will go straight into our reserves… What we get from Saudi Arabia will also beef up our reserves. Apart from all this, we are working on several other transactions.”
The minister acknowledged that the country was facing tough economic challenges, though he maintained the government was “working on multiple fronts to rescue the country”.
“We will deliver to you, until 30th of June, a much better forex position than you can think… We are working on that. There will be a combination of things, and we will be working on it day and night.”
Minister Dar also said the country would complete the IMF program “at all costs” and it will not default on debt obligations despite the economic crisis.
“All targets (for the ninth review) had been completed and we have provided details (to the IMF),” and would be meeting the officials at a donors’ conference in Geneva on January 9, Dar said.
Pakistan entered the $6 billion IMF programme in 2019, which was raised to $7 billion in 2022. The country will get $1.18 billion after the programme’s ninth review, which is currently pending.
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