The Pakistani government has received $2 billion in financial support from Saudi Arabia.
The Finance Minister, Ishaq Dar said a day before the International Monetary Fund’s board is expected to give final approval for a much-needed $3 billion bailout.
Saudi Arabia has deposited the funds with the central bank, Dar said, boosting foreign exchange reserves when Pakistan was left with barely enough to cover a month of controlled imports.
“I thank Saudi Arabia on behalf of the prime minister and army chief,” Dar said in a recorded video statement, terming it a “great gesture” from the longtime ally.
Report says the Middle Eastern country pledged the funds in April but had held off depositing the money with the State Bank of Pakistan until it was sure that the IMF bailout would be forthcoming.
“It reflects the growing confidence of our brotherly countries and the international community in Pakistan’s economic turnaround,” Prime Minister, Shehbaz Sharif said.
Pakistan secured the $3 billion IMF bailout on the last day of June, though it still needs approval from the IMF board, which is meeting on Wednesday.
Under the nine-month arrangement, Pakistan will receive about $1.1 billion upfront and the IMF will stagger disbursements of the rest.
The IMF deal will unlock more bilateral and multilateral financing in addition to the money from Saudi Arabia, and Dar has said that he expects Pakistan’s foreign exchange reserves to rise to $15 billion by the end of this month.
REUTERS/Christopher Ojilere
