By Staff Reporter
ISLAMABAD: Saudi Arabia’s Crown Prince Mohammed bin Salman has directed the Kingdom’s investment arm to consider increasing its deposits to Pakistan’s central bank to reach $5 billion.
Official Saudi Press Agency (SPA) reported that the Crown Prince also “directed the authorities to study increasing the Kingdom’s investments in Pakistan to reach $10 billion”.
“The Crown Prince directed the Saudi Development Fund (SDF) to study increasing the amount of the deposit provided by the Kingdom of Saudi Arabia in favor of the State Bank of Pakistan which have previously been extended on December 2, 2022, to hit a $5 billion ceiling, confirming the Kingdom’s position supportive to the economy of the Islamic Republic of Pakistan and its sisterly people,” it said.
Last month, Saudi Arabia extended the term of a $3 billion deposit to the SBP for one year.
The Kingdom’s fund provides soft loans and grants to developing countries to bolster allies and cement new relationships.
“This came within the framework of the existing communication between HRH the Crown Prince and Muhammad Shehbaz Sharif, Prime Minister of Pakistan.”
It reported that Prince Mohammed’s directives “come to affirm the Kingdom’s position in supporting the economy of Pakistan and its people”.
The statement comes a day after the Crown Prince met with Pakistan’s army chief General Syed Asim Munir to review ways to enhance bilateral ties and strengthen cooperation. A day earlier, the Kingdom also pledged $1 billion at an international conference in Geneva to support Pakistan’s flood relief efforts.
In a Twitter post, Pakistan Information Minister Marriyum Aurangzeb confirmed $1 billion in assistance from Saudi Arabia.
“The brotherly country Kingdom of Saudi Arabia has pledged $1 billion to assist Pakistan in the daunting task of resilient recovery and rehabilitation,” Aurangzeb said.
International donors committed over $9 billion to help the country recover from ruinous floods last year, exceeding its external financing goals of $8.2 billion.
Pakistan, facing growing economic challenges with dollar shortage and massive debt payments, seeks an additional multibillion-dollar financial support package from the Kingdom to shore up its foreign currency reserves.
Central bank’s foreign reserves have fallen to as low as $4.5 billion, barely enough to cover three weeks of imports. Expected funds from the International Monetary Fund’s bailout programme have been delayed as its ninth review is yet to begin formally.
“It’s a strong commitment from Saudi Arabia, but likely to be subject to the resumption of the IMF program, said analyst Tahir Abbas of brokerage Arif Habib Ltd. “The investment would be in setting up a refinery in Pakistan, for which the government needs to complete modalities including finalization of refinery policy.”
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