KSA provides | $4.2b for balance of payment, oil financing

KSA provides  |  $4.2b for balance of payment, oil financing

PM thanks Saudi crown prince for $3b deposit

Staff Report

ISLAMABAD: Adviser to Prime Minister on Finance and Revenue, Shaukat Tarin on Wednesday formally announced that Kingdom of Saudi Arabia (KSA) would provide $4.2 billion to Pakistan to overcome its balance of payment issues and address energy problems faced by the country.
Addressing a press conference along with Federal Minister for Energy, Hammad Azhar, the adviser said that out of this amount US$3 billion would be placed with the State Bank of Pakistan to help balance of payments and $1.2 billion would be provided as oil supplies on deferred payment.
The Minister said that the Crown Prince of Saudi Arabia had told him that Pakistan and Prime Minister Imran Khan hold special place for the Kingdom, so Crown Prince was pleased to do this. He said that the Saudi Finance Minister also telephoned him on Tuesday and informed him about the support. The adviser said that some of the amount had already been released on Tuesday.
He informed that the rate of interest on the loan would be 3.2 percent. Talking about the inflation, the adviser said that oil prices in Pakistan were the lowest as compared to other countries, including regional ones, except the oil producing countries. The Minister categorically denied having any link between the Saudi Arabias this extended facility and International Monetary Fund (IMF) programme, as the agreement had already been made before he flew from Washington.
He said that with the $4.2 billion Saudi Arabian Facility and upcoming agreement with the IMF would have positive impact on market, so there should be no uncertainty.
Meanwhile, speaking on the occasion, Hammad Azhar informed the reporters that the inflation was a global phenomenon as the whole world was passing through commodity cycle. Owing to Covid-19, almost all the countries gave stimulus packages which had paced up economy at a time when production was hit by shutdowns to prevent Coronavirus, he added. Likewise, he added prices of Urea fertilizer were low whereas the government had to provide Rs 450 billion tax relaxations to lower the burden of increasing oil prices in international marker. He expected that the world commodity cycle would break within around 6 months and the prices in world market would come down leaving positive impact on inflation in Pakistan.
On Financial Action Task Force (FATF), he said that Pakistan has made tremendous progress on two simultaneous plans. He said, the country had completed 26 out of 27 action points of earlier plan and majority of the FATF members had expressed satisfaction made over the remaining one point. Separately, Prime Minister Imran Khan thanked Saudi Arabia’s Crown Prince Mohammed bin Salman for depositing $3 billion in Pakistan’s central bank.
The premier took to his official Twitter account to thank the Prince for his “support” and for financing refined petroleum products with $1.2 billion. The KSA “has always been there for Pakistan in our difficult times including now when world confronts rising commodity prices,” added the Premier.