Finance Minister Ishaq Dar said on Tuesday that the State Bank of Pakistan (SBP) has received $2 billion from Saudi Arabia, in yet another boost for the ailing economy following the $3 billion Stand-by Agreement with the International Monetary Fund (IMF).
“This inflow has increased the forex reserves held by SBP and will accordingly be reflected in the forex reserves for the week ending July 14, 2023,” Dar said.
“On behalf of the prime minister and army chief, I extend our heartfelt thanks to the leadership of the Kingdom of Saudi Arabia for their great gesture and support by placing the said deposit of $2 billion with the State Bank of Pakistan,” the minister added.
Prime Minister Shehbaz Sharif also expressed his gratitude to Saudi Arabia and Crown Prince Mohammad Bin Salman for ensuring financial support to Pakistan.
“This deposit will strengthen Pakistan’s foreign exchange reserves. It reflects the growing confidence of our brotherly countries and the international community in Pakistan’s economic turnaround. We remain committed to making all necessary efforts to improve Pakistan’s economy,” the premier said.
He also appreciated Dar and Chief of Army Staff General Asim Munir for their efforts in this regard.
The prime minister later held a meeting with Saudi Ambassador Nawaf Bin Saeed Ahmed Al-Malkiy and thanked him for the Saudi leadership’s “ unwavering support for Pakistan“.
He also asked the ambassador to convey his “special gratitude” to the Saudi crown prince for the $2bn deposit.
Saudi Arabia had already pledged the money to Pakistan and waited for the much-awaited IMF deal to be announced before depositing it.
The financial support will shore up the depleting foreign exchange reserves at the central bank, which had dipped to cover barely a month of controlled imports.
The executive board of the IMF will meet on July 12 to review the $3 billion Stand-by Arrangement (SBA) for Pakistan, the staff-level pact for which was finalised last week.
Pakistan was absent from an earlier schedule released in June, igniting speculation that the IMF was not going to release funds from an earlier programme that expired on June 30.
On June 29, the IMF and Pakistan reached a stand-by arrangement (SBA) to ease the country’s financial crisis. The nine-month SBA, if approved, will bring $3bn, or 111pc of Pakistan’s IMF quota.
The board’s approvals are generally granted once a staff-level agreement (SLA) is done. The Pakistan government was expecting about $2.5bn from the IMF, but it was given $3bn. Pakistan had earlier cleared eight of the 11 listed programme reviews, with the ninth review pending since November last year.