The State Bank of Pakistan said on Thursday that the Saudi Fund for Development (SFD) has extended the period for the Kingdom of Saudi Arabia to collect $3 billion on December 5, 2024 for another year.
The development came after Prime Minister Shahbaz Sharif and Saudi Arabia’s Crown Prince Mohammed bin Salman met on the sidelines of the “One Water Summit” during their visit to Riyadh two days ago.
During the meeting, the two leaders agreed to bring qualitative change in the economic, trade and investment relations between the two countries.
He also expressed satisfaction over the speed of implementation of Saudi MoUs and agreements regarding investment in Pakistan.
In its statement today, the central bank said: “The said amount is deposited with the State Bank of Pakistan on behalf of the Islamic Republic of Pakistan.”
“The extension of the deposit period is a continuation of the assistance provided by Saudi Arabia to the Islamic Republic of Pakistan, which will help strengthen Pakistan’s foreign exchange reserves and support the country’s economic growth and development.” . he added.
It is worth noting that the initial $3 billion deposit agreement was signed with the SFD in the year 2021 and subsequently in 2022 and 2023, following the issuance of royal directives for closer ties between the two brotherly nations. Reflecting the continuity, was started as According to the central bank.
Along with receiving financial assistance from the kingdom, Pakistan signed several memoranda of understanding (MOUs) worth $2 billion with Saudi Arabia in October to promote bilateral trade and investment.
These agreements were signed during a three-day visit by a high-level Saudi delegation led by the Minister of Investment of Saudi Arabia.
The agreements include $70 million investment in agriculture sector, establishment of advanced semiconductor chip manufacturing in Saudi Arabia, establishment of textile industry, white oil pipeline project, an MoU to explore investment opportunities, hybrid power project. , including the development of transformer manufacturing facilities. Cyber security measures for consumers and businesses in both countries and exports of spices and vegetables from Pakistan.
Additionally, the agreements outline the establishment of a manufacturing facility for surgical and dental equipment and cooperation in the federal government’s e-learning and digitization programs.
The country was on the brink of default in 2022, but this was averted after the International Monetary Fund (IMF) approved a short-term bailout with tough conditions – fueling inflation as Pakistan undertook several structural reforms. In which an increase in gas was observed. , energy, and fuel prices.
Later in September this year, the Fund’s Executive Board approved $7 billion for Pakistan under its Expanded Fund Facility (EFF) and disbursed the first tranche of $1.1 billion.
Islamabad has over the years been heavily dependent on IMF bailouts, at times close to the brink of sovereign default, and the United States to provide financial assistance to meet external financing targets set by the IMF. Countries like UAE and Saudi Arabia have to be turned.