Third $1 billion deposit received from Saudi Arabia: State Bank

Updated January 25, 2019

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Prime Minister Imran Khan in conversation with Saudi Crown Prince Mohammed bin Salman during the premier's trip to Riyadh in October last year. — File/Online
Prime Minister Imran Khan in conversation with Saudi Crown Prince Mohammed bin Salman during the premier's trip to Riyadh in October last year. — File/Online

The State Bank of Pakistan (SBP) on Friday confirmed that Pakistan has received a third and last $1 billion tranche as part of balance-of-payments support from Saudi Arabia.

Saudi Arabia in October last year had stepped forward with a $6 billion bailout package — $3bn in foreign currency support and another $3bn in deferred payments on oil imports — for Pakistan’s ailing economy.

The country’s current account deficit rose to $7.9bn in the first half of the current fiscal year and is likely to reach $16-18bn by June 30.

Pakistan had seen some relief after the first tranche of $1bn from Saudi Arabia was received on November 9 but the amount had run out by December's first week. A second $1bn deposit from the Kingdom had followed in December.

The money comes a day after the central bank received $1bn from the United Arab Emirates (UAE) following an agreement with the Abu Dhabi Fund for Development (ADFD) in Abu Dhabi on Jan 22.

Finance Minister Asad Umar while presenting the mini-budget in the parliament on Wednesday had remarked that the government may enter into an International Monetary Fund-led programme. However, he also said that the government was not in a hurry as it was considering other options including bilateral support.

Funds from Saudi Arabia and the UAE have had no impact on the exchange rate; however, a slight change was observed in the open-market following SBP’s agreement with the UAE. “The fluctuation of 20-30 paisa does not matter but the situation has improved and will improve with more inflows from the UAE,” President Forex Association of Pakistan Malik Bostan told Dawn.