Islamabad: Saudi Arabia has quietly rolled over its USD 3 billion debt to Pakistan as the country struggled to meet the tough conditions of the International Monetary Fund (IMF), according to a media report on Friday, July 17.
The International Monetary Fund in 2024 provided a USD 7 billion loan tied to several conditions, including that the country would ensure financial stability with healthy foreign exchange reserves.
The Kingdom had provided a USD 3 billion loan in April this year for three months to help Pakistan pay off debt to the United Arab Emirates, which had demanded the payment after tension in the region due to the Iran war.
According to The Express Tribune, Finance Minister Muhammad Aurangzeb said on Thursday that it was “all good” on the rollover of the USD 3 billion debt.
“We are all good on that,” the finance minister briefly said while responding to a question about whether the Kingdom of Saudi Arabia rolled over the USD 3 billion cash deposit that matured this week.
He was speaking to the media soon after attending a meeting of the Senate Standing Committee on Finance.
The finance minister, along with Power Minister Sardar Awais Leghari, visited Saudi Arabia last weekend to discuss bilateral economic and financial matters. It was the first brief statement the finance minister made after his return.
UAE, Saudi Arabia, China commit under IMF programme
Under the USD 7 billion IMF programme, the UAE, Saudi Arabia and China had committed to maintaining their combined USD 12.5 billion in cash deposits with the State Bank of Pakistan at least until the programme expires in September next year.
But the UAE withdrew support, and the gap was filled by Saudi Arabia, which increased its exposure to USD 8 billion.
Sources said Pakistan was working on multiple options to extend the longevity of its short-term external debt and also stagger the upcoming payments of energy debt being obtained by Chinese firms to set up power plants under the China-Pakistan Economic Corridor (CPEC).
The paper reported that Pakistan has also requested Saudi Arabia to provide a USD 6.7 billion oil facility on deferred payments for a period of 15 years to ensure the nation’s energy security in the midst of the renewed Middle East conflict.
Foriegn exchange reserves
Pakistan’s gross official foreign exchange reserves stand at USD 18.5 billion, equal to three months of import cover. However, the total reserves are more than USD 22 billion if the portion kept by the private banks is added up, according to the central bank.
