Karachi, The State Bank of Pakistan on Saturday received a much-awaited $3 billion deposit from the Saudi Fund for Development.
Taking to the official Twitter handle, Adviser to Prime Minister on Finance and Revenue Shaukat Tarin announced: “Good news, $3 billion Saudi deposit received by SBP.”
The PM's aide acknowledged the support provided by Saudi Arabia and wrote: “I want to thank Crown Prince Mohammed Bin Salman and Kingdom of Saudi Arabia for the kind gesture.”
The deposit is expected to lend support to the local currency and help bolster foreign exchange reserves of the country. According to market rumours, the Pakistani rupee is expected to recover partially as the deposit will support market sentiment.
On November 29, the central bank of Pakistan and the Saudi Fund for Development signed a deposit agreement for funds worth $3 billion.
According to a joint statement, under this deposit agreement, SFD shall park $3 billion in the SBP. “The deposit amount under the agreement shall become part of SBP’s foreign exchange reserves,” it had said.
In October, during Pakistan Prime Minister Imran Khan’s visit to Riyadh, the Saudi government had announced a $4.2 billion package that includes $1.2b oil on deferred payment facility.
The Saudi money comes in the form of a loan and Pakistan will be paying a comparatively high interest rate on it.
Pakistan has secured the $3bn loan at an interest rate of 4% while the $1.2bn oil on deferred payment facility has been secured at an interest rate of 3.8%.
Pakistan will have to repay the money after one year. Saudi Arabia may also require a refund on a 72-hour notice.In a statement on Saturday, Ismail Iqbal Securities Head of Research Fahad Rauf cherished $3 billion received from Saudi Arabia and added that it should give some stability to rupee.
“Pakistan would issue a Sukuk worth $1 billion soon,” he said. “Receipt of another $1 billion from the International Monetary Fund in expected in January.”