Pakistani officials claim package of $ 8 billion
ISLAMABAD, May 1, 2022- What Shehbaz Sharif got from Saudi Arabia, which was his first foreign visit? This is being discussed by public and experts in Pakistan.
Pakistan has succeeded to obtain a package of about $ 8 billion from Saudi Arabia and it will take two weeks to prepare the document.
Quoting reliable sources media reported that on the occasion of Prime Minister Shehbaz Sharif’s visit to Saudi Arabia, Pakistan has been able to obtain a reasonable size package of about $ 8 billion from Saudi Arabia, which includes oil financing facility, extra cash whether in the form of deposits, Sukuks and the current $ 4.2 billion rollover.
The technical details are being worked out in this regard and it will take two weeks to prepare all the documents after which they will be signed.
Prime Minister Shehbaz Sharif and his official delegation have left Saudi Arabia, but Finance Minister Miftah Ismail is still there and is finalizing additional financial package procedures. Pakistan’s request and Saudi response
Pakistan had requested to increase the oil facility from $ 1.2 billion to $ 2.4 billion, which Saudi Arabia has accepted. However, the existing deposit of $ 3 billion has also been agreed to rollover by June 2023.
Official sources said that Pakistan and Saudi Arabia have negotiated to provide additional package of $ 2 billion through deposit or Sukuks and possibly more money will be provided to Pakistan.Sources said that the volume of the package as a whole will be estimated when the surplus is finalized, with the total approaching $ 8 billion.
Previous Saudi financial facilities
Saudi Arabia deposited $ 3 billion in State Bank of Pakistan in December 2021. While Saudi Oil Facility (SOF) has been in operation since March 2022, Pakistan has also been provided $ 100 million in oil acquisition.
It is also important to mention here that Saudi Arabia provided a package of $ 7.5 billion during the PMLN government in 2013-18. Whereas during the PTI regime, Saudi Arabia provided a package of $ 4.2 billion. Now Saudi Arabia is giving Islamabad additional financial package, while Pakistan is in dire need of it.
Pakistan’s foreign exchange reserves
Pakistan’s foreign exchange reserves have dropped by $ 6 billion to $ 10.5 billion in the last 6 to 7 weeks.
Current account deficit
In the first 9 months, the current account deficit has risen to $ 13.2 billion and external debt repayment pressures have increased.
Debt payment not possible without IMF Program
Pakistan has to pay $ 3 billion worth of debt in the last quarter of this fiscal year (between April and June). The revitalization of the IMF program is considered essential because the gross external financial needs are estimated at $ 35 billion for the next fiscal year 2022-23, while without the IMF program this huge financial gap could not be eliminated.
Imports of non-essential items suggested
However, some independent economists, especially Dr Ashfaq Hassan Khan, have suggested that imports of non-essential items, including luxury cars, should be banned.