Saudi's $ 6 billion aid will ease Pakistan's government

Saudi Arabia will benefit from a $ 6 billion loan package and deferred payments to Pakistan, which will immediately relieve the cash-strapped government and improve its bargaining position in difficult negotiations with the IMF, announced today. 39 of the media.

In the agreement announced Tuesday after Prime Minister Imran Khan convened Saudi King Salman bin Abdulaziz, Riyadh announced that it would bring Pakistan $ 3 billion in foreign currency support for a year and a new year. loan of up to $ 3 billion for oil imports.

Pakistan 's Finance Minister Asad Umar recently said the country would need more than $ 12 billion to clean up its finances as the current account deficit widens and foreign currency reserves rise. collapse.

Saudi aid will immediately bring official foreign exchange reserves back to double digits, in addition to easing tensions on the external sector.

Saudi Arabia will deposit $ 3 billion in cash with the State Bank of Pakistan, in addition to providing a one-year deferred payment mechanism for the importation of oil, oil and gas. Worth up to $ 3 billion, according to the Ministry of Foreign Affairs of Pakistan.

The injection of funds will immediately relieve the government and improve its bargaining position in upcoming talks with the International Monetary Fund (IMF) on program loans, starting Nov. 7, said the Express Tribune.

Cash assistance will reduce the need for devaluation of the rupee, as ad hoc aid will improve – for now – the macroeconomic projections, said the report citing independent economists.

The Saudi package could give the government some breathing space to face the economic challenges, but it would not be enough to avoid the IMF's facilities, the Dawn newspaper reported.

Improved foreign exchange reserves are believed to strengthen Pakistan's negotiating position in the IMF negotiations, he added.

The situation could still improve if China also pledged to help its "all-time friend", he said, pointing out that Mr. Khan should visit China on the 3rd. November for his first visit.

Saudi Arabia agreed to bail out Pakistan during the prime minister's second visit as the deal could not be reached during his visit to the kingdom in September, the paper said.