RIYADH: Islamabad’s attempts to increase the nation’s foreign exchange reserves with Saudi Arabia’s assistance have begun to bear fruit as Riyadh is considering increasing its deposit with the State Bank of Pakistan (SBP) from $3 billion to $5 billion.
Crown Prince Mohammad Bin Salman reportedly instructed his finance authorities to research raising the Pakistan deposit by $2 billion on Tuesday, according to Saudi media.
The news comes a day after the Saudi crown prince met with General Asim Munir, the chief of army staff, who is making his first abroad official trip to the country.
The $3 billion deposit in the State Bank of Pakistan that was due to mature on December 5 was extended by the Saudi Fund for Development (SFD) last month.
In order to increase its foreign exchange reserves, the SBP and the SFD entered into a contract in November 2022 for the SBP to receive $3 billion, which will be deposited in the central bank’s account.
Crown Prince Mohammad Bin Salman has reportedly ordered the SDF to investigate raising the deposit’s amount, which was previously extended to December 2, 2022, to a maximum of $5 billion, according to a report from the Saudi Press Agency (SPA). This confirms the kingdom’s support for Pakistan’s economy and people.
The Pakistani Prime Minister Muhammad Shehbaz Sharif and HRH the Crown Prince had previously communicated about this, the SPA continued.
The Saudi leader also ordered to examine increasing Riyadh’s investments in Pakistan, which were earlier announced on August 25, 2022, to reach $10 billion, according to the state news agency.
Due to declining foreign exchange reserves, which have fallen below $4.5 billion, or three weeks’ worth of imports, Pakistan is currently experiencing a currency crisis.
Islamabad, on the other hand, is working feverishly to restart the International Monetary Fund’s (IMF) loan programme, which has been stagnant for months.
On the eve of the donors’ summit, a Pakistani delegation met with IMF representatives in Geneva and reaffirmed its commitment to seeing the programme through.
Following the meeting, a statement from the Finance Ministry said that Finance Minister Muhammad Ishaq Dar and IMF officials “addressed challenges to regional economies in the face of climate change.”
It further stated that “(The) Finance Minister) underlined the resolve to fulfil the Fund initiative.”
Pakistan only has enough foreign exchange reserves to cover one month’s worth of imports as a result of the lender’s failure to authorise the release of $1.1 billion that was originally scheduled to be paid out in November of last year.