Pakistan on Saturday received a $3 billion loan from Saudi Arabia, the chief minister’s finance adviser said, as part of an economic sustain package.
Pakistan has faced growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating money.
Pakistan’s total liquid foreign reserves stand at $22,498 billion, based on central bank data.
Shaukat Tarin, finance adviser to Pakistan’s chief minister Imran Khan, said in a tweet: “I want to thank His Excellency Crown Prince Mohammed Bin Salman and Kingdom of Saudi Arabia for the kind gesture.”
The loan from Saudi Arabia will be for one year at a 4% interest rate under the terms of the package, which was signed last month.
“This is positive news … and will help bolster both the foreign exchange reserves and sentiments in the forex market,” Saad Hashemy, executive director at BMA Capital said.
The loan comes a week after the International Monetary Fund agreed with Pakistan on measures needed to revive a stalled $6 billion funding programme.
The completion of the review, pending since earlier this year, would make obtainable 750 million in IMF special drawing rights, or around $1 billion, bringing total disbursements so far to about $3 billion.
Pakistan’s central bank has raised its benchmark interest rate by 150 basis points to 8.75% to counter inflationary pressures.
Inflation had reached 11.5% in November, up from 9.2% a month earlier.
The Pakistani rupee, which closed on Friday at 176.77 at inter-bank against a dollar, has depreciated more than 11% since the start of this year.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated satisfy.)
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