Saudi Arabia has announced depositing $3 billion in the State Bank of Pakistan and $1.2b oil deferred payments facility during the year.
Information Minister Fawad Chaudhry and Energy Minister Hammad Azhar took to social media to confirm the news.
"Breaking news: Saudi Arabia announcement support Pakistan with 3 billion US dollars as deposit in Pakistan's central bank and also financing refined petroleum product with 1. 2 billion US dollars during the year," the information minister tweeted.
Hammad Azhar said in a tweet that the Saudi Development Fund has generously announced for Pakistan an oil deferred payments facility of $1.2bn/annum and a $3 bn deposit with SBP. "This will help ease pressures on our trade & forex accounts as a result of global commodities price surge," added his tweet.
According to Saudi news agency SPA, the Saudi Fund for Development (SFD) announced the issuance of the Royal Directive to deposit an amount worth of US$3 billion into the State Bank of Pakistan to help the Pakistani government support its foreign currency reserves and support it in facing the impacts of the coronavirus pandemic.
The SFD added that, in addition, the royal directive was issued to finance the oil derivatives trade with a total amount of US$1.2 billion throughout the year.
It pointed out that these royal directives confirm the Kingdom of Saudi Arabia's ongoing stance in supporting the economy of the sisterly Republic of Pakistan.
Finance Adviser Shaukat Tarin and Energy Minister Hammad Azhar will hold a press conference today to share the details.
https://twitter.com/shaukat_tarin/status/1453190597704097794
The announcement comes a day after Prime Minister Imran Khan returned from a three-day tour of the Kingdom amid a delay in the conclusion of talks between Pakistan and the IMF for the release of the $1 billion tranche.
The IMF negotiations were scheduled to be concluded on October 15. The delay has brought the rupee under pressure plus depletion of the foreign exchange reserves. The foreign exchange reserves also dipped by $1.7 billion to $17.5 billion during the week ending October 15.
Pakistan made a request to Saudi Arabia to provide oil on deferred payments for two years and the cash deposits for three years. According to the Saudi Press Agency, a generous directive to deposit $3 billion with the State Bank of Pakistan will help the Pakistani government support its foreign exchange reserves. The country's oil imports hit $4 billion during the first quarter of this fiscal year and the Saudi aid is likely to take the pressure off from the exchange rate.