By Staff Reporter
KARACHI: Pakistan’s central bank received $1 billion from Saudi Arabia on Monday, the second installment of a fresh $3 billion deposit designed to cushion the country’s foreign-exchange reserves as it navigates more than $3.5 billion in debt repayments to Gulf allies and international bondholders this month.
The State Bank of Pakistan said the funds arrived with a value date of April 20, completing the first half of the newly agreed support package from Riyadh. The initial $2 billion tranche landed on April 15, the bank said in a statement on Tuesday.
Finance Minister Muhammad Aurangzeb disclosed the Saudi commitment last week, saying Riyadh had pledged the additional $3 billion in deposits while also agreeing to extend an existing $5 billion deposit for three years. The longer tenor removes the deposit from an earlier annual rollover arrangement, providing Islamabad with more predictable financing. Aurangzeb made the remarks to reporters while in Washington.
The inflows arrive at a critical moment. Pakistan repaid about $1.4 billion in maturing Eurobonds this month and is scheduled to return a total of $3.5 billion to the United Arab Emirates by the end of April under bilateral deposit arrangements. A central-bank official said Saturday that $2 billion of the UAE obligation had already been settled, leaving $1.5 billion still due. The UAE repayment alone represents roughly 18% of Pakistan’s foreign-exchange holdings.
The South Asian nation’s economy has leaned heavily on bilateral support from Saudi Arabia, China and other Gulf partners in recent years to meet the reserve requirements attached to its $7 billion International Monetary Fund program. Saudi Arabia has emerged as one of Islamabad’s most reliable backers, supplying deposits, deferred-payment oil facilities and direct budgetary aid during periods of acute external financing pressure.
A spokesperson for Saudi Arabia’s Ministry of Finance confirmed the new deposit to Reuters, describing it as support for Pakistan’s balance of payments. The latest assistance echoes Riyadh’s intervention in 2018, when it unveiled a $6 billion package that included a $3 billion central-bank deposit and $3 billion in oil supplies on deferred terms. That earlier lifeline helped stabilize reserves after Pakistan’s currency came under intense pressure.
With the fresh Saudi funds in hand, Pakistani authorities are working to rebuild buffers depleted by the debt maturities. The central bank has not commented on the precise impact on reserves or the timing of the remaining UAE payment.
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