Saudi Arabia sends $1 billion more to Pakistan

Islamabad: Pakistan’s meagre foreign reserves were bolstered on Friday as the second $1 billion tranche was received from Saudi Arabia, said the State Bank of Pakistan (SBP).

The country’s foreign exchange reserves now stand at $9.24 billion, with the third installment from Riyadh expected in January.

Prime Minister Imran Khan visited Riyadh on the invitation of King Salman bin Abdul Aziz to participate in the Future Investment Initiative (FII) Conference in October.

The kingdom had agreed to park $3 billion in Pakistan’s foreign currency reserves for a year and establish a credit line worth $3 billion for the sale of petroleum products on credit for three years.

“This arrangement will be in place for three years, which will be reviewed thereafter,” said the foreign office. Pakistan had received the first tranche of $1 billion in November.

The much-needed inflow came at a time when Pakistan and the International Monetary Fund (IMF) are negotiating a bailout package.

The loan has improved the country’s capacity to pay for imports and conveniently pay off upcoming external debt installments in the current fiscal year.

Earlier, the reserves had contracted fast and dropped to a four-and-a-half-year low of $7.48 billion by November 9, 2018, according to the central bank.