Following negotiations between Pakistani Prime Minister Imran Khan and Saudi Crown Prince Mohammad bin Salman in Riyadh this week, it was revealed on Wednesday that Saudi Arabia has agreed to provide $4.2 billion in assistance to the cash-strapped country in order to improve its economic system.
The announcement was made on Twitter by Information Minister Fawad Chaudhry, who noted that the assistance had arrived just two days after Khan conducted a three-day visit to the Gulf state.
A tweet from him read, “Saudi Arabia’s declaration assists Pakistan by depositing 3 billion dollars in the Central Bank of Pakistan and lending 1.2 billion dollars to finance refined petroleum products throughout the course of the year.”
Prime Minister Khan expressed gratitude to Prince Salman for his generous assistance at a time when Pakistan’s economic sector was experiencing problems.
“I would like to express my gratitude to HRH Prince Mohammad bin Salman for providing Pakistan with a $3 billion deposit in the country’s central bank as well as $1.2 billion in funding for refined petroleum products. On Twitter, he remarked that “KSA has always been there for Pakistan in our tough times, even today when the globe is confronting increasing commodity prices (sic).”
For the first time in 2018, Saudi Arabia provided Pakistan with $three billion in money deposits and offered a $three billion oil facility to help the country boost its foreign change reserves in 2018.
However, as a result of a deterioration in bilateral ties later on, Islamabad was forced to refund $2 billion of the $three billion deposits made.
In June of this year, Pakistan announced that Saudi Arabia was planning to construct a $1.5 billion oil refinery that would produce $1.5 billion per year.
The company has now provided direct disposal assistance as well as oil amenities after Khan’s visit to the country.
A formal statement of the settlement is expected to be made by Shaukat Tarin, Prime Minister’s advisor on finance and income, as well as Energy Minister Hammad Azhar, according to a report in Dawn newspaper.
According to the report, the Saudi authorities would immediately deposit $three billion in Pakistan’s account for a year and keep the money flowing at the very least until the completion of the International Monetary Fund (IMF) programme in October 2023, according to an official from the kingdom’s government.
A six-billion-dollar agreement between Pakistan and the International Monetary Fund was inked in July 2019, but the programme was derailed in January 2020, and then temporarily resumed earlier this year before veering off the rails once again in June.
The article further indicated that the Saudi authorities will deliver crude oil to Islamabad on the basis of delayed payments worth up to $1.5 billion per year, according to the report.