Pakistan Has To Return $3 Billion To Saudi Arabia By October 2022
Saudi Arabia, the oil-rich Kingdom, earlier had provided $3 billion in cash deposits and extended another $3 billion oil facility credit in 2018. However due to soured ties Pakistan had to return $2 billion in 2020.
Under a new agreement, Saudi Arabia revived its financial support to Pakistan, including about $3 billion in deposits and $1.2 billion to $1.5 billion worth of oil supplies on deferred payments. Pakistan also pledged to return the $3 billion within a year.
Finance Minister Shaukat Tarin told the Senate, the upper house, that the Saudi Fund for Development (SFD) in October 2021 placed the amount in the account of the country’s central bank, the State Bank of Pakistan.
Cash-strapped Pakistan has to return $3 billion to Saudi Arabia within a year which it had borrowed from Riyadh in 2021 to improve its dwindling foreign exchange reserves, it emerged on Friday.
Tarin said that the interest rate on the loan was four per cent which would have to be paid every three months.
“Interest rates are rising across the world. The interest rate for the Saudi loan being four per cent is not something bad,” he said, adding the principal amount would have to be returned in lump sum.
He said there was no clause in the agreement to extend the loan.
“The Saudi government has told us that they can ask for their money back if Pakistan defaults at any point,” Tarin said and added that there was no question of default.
State-run Radio Pakistan quoted Tarin as saying that Pakistan would start getting crude oil from Saudi Arabia on deferred payments from March.
