Pakistan has received deposits of $2 billion from Saudi Arabia, Finance Minister Ishaq Dar said on July 11, ahead of a key meeting of the IMF to endorse a loan for the cash-strapped country.
Last month, the Pakistan government and the International Monetary Fund (IMF) reached a long-awaited staff-level agreement to inject a $3 billion Standby Arrangement (SBA) into the ailing economy after months-long negotiations that pushed the country to the brink of default.
The Executive Board of the IMF is set to meet on July 12 to review the SBA for Pakistan.
“State Bank of Pakistan (SBP) has received (a) deposit of $2 billion from the Kingdom of Saudi Arabia. This inflow has increased the forex reserves held by SBP and will accordingly be reflected in the forex reserves for the week ending 14 July 2023,” Mr. Dar said in a statement on Twitter.
Prime Minister Shehbaz Sharif also extended deep gratitude to the “leadership and brotherly people of the Kingdom of Saudi Arabia” for the deposit and thanked Crown Prince Mohammed bin Salman for ensuring this 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 Mr. Dar and Army chief General Asim Munir for the “valuable efforts they have made” for the economy's betterment.
Riyadh had already pledged the money but waited for the IMF deal to be announced before depositing it. Similarly, the UAE had promised support which helped Pakistan to convince the IMF that it had enough backing to fulfil its conditions to improve the balance of payments.
According to data released by the SBP on Monday, the cash-strapped country lost over $4 billion in remittances sent by expatriates to illegal channels in the current fiscal year, much higher than the amount the government struggled to secure from the IMF as a bailout.
On Friday, the country’s foreign exchange reserves showed improvement for the second consecutive week, when they reached $4.4 billion, The Express Tribune newspaper reported.
Pakistan's economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.
