Saudi Arabia revives cash, oil support to Pakistan

Originally posted to The Middle East Monitor website, 27 October 2021

Saudi Arabia has revived its financial support to Pakistan to prop up the South Asian country’s tottering economy, Anadolu News Agency reports.

Riyadh will immediately deposit $3 billion into the State Bank of Pakistan (SBP) and provide oil supplies worth $1.2 billion on deferred payments, Pakistani officials confirmed late on Tuesday night.

“The Saudi Development Fund has generously announced for Pakistan an oil deferred payments facility of $1.2 billion/annum and a $3 billion deposit with SBP,” Energy Minister, Hammad Azhar, said on Twitter.

“This will help ease pressures on our trade and forex accounts as a result of global commodities price surge.”

The development came during Prime Minister, Imran Khan’s three-day visit to Riyadh this week, who hailed Saudi Arabia for its consistent support to Islamabad.

“I want to thank HRH Prince Mohammad bin Salman for supporting Pakistan with $3 billion as deposit in Pakistan’s central bank and financing refined petroleum product with $1.2 billion,” he said on Twitter.

“KSA (Kingdom of Saudi Arabia) has always been there for Pakistan in our difficult times, including now, when the world confronts rising commodity prices.”

In 2018, Riyadh gave $3 billion in cash and a $3 billion oil facility to Pakistan to help shore up its depleted foreign exchange reserves.

However, Islamabad had to return $2 billion of the $3 billion as relations between the two allies deteriorated, mainly on the issue of the 2019 Kuala Lumpur Summit.

The summit, backed by countries including Malaysia and Turkey, was opposed by Saudi Arabia and the UAE, who viewed it as a threat to their grip on the Muslim world.

Pakistan, which was among the initial supporters of the meeting, was forced to pull out of the summit due to Riyadh’s concerns.

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