27 Oct 2021
$4.2 Billion Pledge of Saudi Arabia to Support Economy of Pakistan
The Index Today
Saudi Arabia has pledged to provide $4.2 billion in assistance to the economy of Pakistan, providing relief to the South Asian nation at a time when its foreign-exchange reserves are rapidly diminishing.
State-owned Saudi Press Agency reported that the Saudi Fund for Development announced a deposit of $3 billion with State Bank of Pakistan to help shore up its reserves, Shaukat Tarin, the South Asian nation’s finance adviser, said via a Twitter post. It will also finance oil derivatives trade worth $1.2 billion during the year.
According to Muhammad Umar Zahid, director general for debt at the finance ministry, reserves with Pakistan’s central bank have declined for five consecutive weeks to $17.5 billion as of Oct. 15 and the rupee has consistently depreciated against the dollar, making it the worst performing Asian currency tracked by Bloomberg over the past six months. The nation has to repay $14 billion in external debt over the next three to four years.
Stocks were seen rallied after news of the support, with Pakistan’s key equities index rising 1.4% as of 10:17 a.m. local time, in addition to the Bloomberg news.