Business

Pakistan expecting multi-billion dollar support from Saudi Arabia: sources

Published

1 year ago

Farwa

Pakistan to likely secure a multi-billion dollar financial support.
Package to include deposits and oil on deferred payments.
FinMin Dar hopes talks with Saudi Arabia would materialise soon.

ISLAMABAD: Pakistan will likely secure a multi-billion dollar financial support package from longtime ally Saudi Arabia this month, two sources told Reuters.

The two finance ministry officials said the package will include deposits boosting the country’s foreign reserves, and oil on deferred payments.

Minister for Finance and Revenue Senator Ishaq Dar said earlier during a press conference hoped talks with Saudi Arabia would materialise soon — and Pakistan would not “default”.

Saudi Arabia Finance Minister Mohammed Al Jadaan last week said the kingdom would help Pakistan’s finances as it looks to help shore up alliances with countries struggling due to soaring inflation.

Addressing a press conference in Riyadh, Al Jadaan said the Saudi government will “continue to support Pakistan as much as we can.”

Earlier this month, Saudia Arabia extended the term of a $3 billion deposit to boost foreign currency reserves and help Pakistan in overcoming the economic repercussions of the cataclysmic floods.

It should be noted that Pakistan is in dire need of funds as the country’s foreign exchange reserves held by the central bank fell $784 million to $6.7 billion as of December 2.

The decline means the reserves have fallen further from November’s barely one month of import cover, even as it battles decades of high inflation and scrambles to secure International Monetary Fund (IMF) funds.

The country’s foreign exchange reserves have fallen below the $7 billion level for the first time since January 2019. The current reserves stand at around $6.7 billion — almost equal to $6.6 billion on January 18, 2019.

A top official of the Finance Division told The News that in a bid to secure a breathing space amid the depleting foreign currency reserves, Pakistan is likely to secure a $4.2 billion additional package from the Kingdom of Saudi Arabia — including $3 billion deposits and a $1.2 billion oil facility on deferred payment.

With the materialisation of the augmented financial package, the total financial assistance from the KSA for Pakistan would go up to $8.4 billion in total.

Business

Before the IMF delegation arrives, Pakistan will “finalize” its FY2024–25 budget targets.

Published

9 mins ago

Farwa

In order to discuss the new loan program that Pakistan is requesting to handle its financial needs, the IMF delegation is expected to arrive in Pakistan on May 15.

Within days of the IMF mission’s arrival, sources claim that the government accelerated its budget targets preparations. Relevant ministries have been instructed by the Ministry of Finance to meet targets as soon as possible.

Based on the information provided by the sources, the IMF will get a framework for all significant budgetary targets.

Before the IMF mission arrives, a strategic paper on the FY25 budget is reportedly going to be approved by the federal cabinet.

In addition, a preliminary estimate will be created for salaries, pensions, government spending, and loan repayments. The Federal Board of Revenue (FBR) will also set tax collection goals and defense spending.

According to additional sources, the economic team has been given a deadline by the Prime Minister’s Office to finish working on the FY25 budget.

Business

See the new rates when Pak Suzuki announces a significant decrease in car costs.

Published

15 mins ago

Farwa

The costs of cars on the Swift models from Pakistan Suzuki Motor Company have been reduced by Rs. 710,000.

According to a notice from the corporation, the new pricing will take effect on May 1, 2024, and it is a reaction to the state of the market.

The Swift GL MT model is now available for Rs 4,336,000, a decrease of Rs 85,000, according to the notification about the changed pricing.

After dropping down Rs159,000 from its previous price of Rs4,719,000, the Swift GL CVT is now available for Rs4,560,000.

With a price drop of Rs710,000, or Rs5,429,000, to Rs4,719,000, Swift GLX CVT saw the most price decline.

Business

Pakistan’s $1.1 billion loan tranche is approved by the IMF board.

Published

2 days ago

Farwa

The cash is the third and last installment of a $3 billion standby agreement with the international lender that it obtained to prevent a sovereign default last year and that expires this month.

Following the discussion of Pakistan’s request for the release of funds at today’s IMF Executive Board meeting in Washington, the final tranche was authorized.

Pakistan and the International Monetary Fund (IMF) came to a staff-level agreement last month about the last assessment of a $3 billion loan package.

The total amount of $1.9 billion that the nation has received thus far is divided into two tranches: $1.2 billion in July and $700 million in January 2024.

According to Finance Minister Muhammad Aurangzeb, Islamabad could have a staff-level agreement on the new program by early July. Pakistan is asking the IMF for a fresh, longer-term loan.

In order to support macroeconomic stability and carry out long-overdue and difficult structural changes, Islamabad says it is seeking a loan for a minimum of three years; however, Aurangzeb has reluctant to specify the specific program in question. If approved, it would be Pakistan’s 24th IMF bailout.

See Also: Pakistan formally requests new IMF assistance

The event transpired on the day following Prime Minister Shehbaz Sharif’s meeting with IMF Managing Director Kristalina Georgieva, during which he reaffirmed the government’s resolve to restart Pakistan’s economy.

During the meeting held in conjunction with the World Economic Forum Special Meeting, the prime minister announced that he had given his finance minister, Muhammad Aurangzeb, strict instructions to implement structural reforms, maintain strict fiscal discipline, and pursue prudent policies that would guarantee macroeconomic stability and continuous economic growth.

Georgieva was commended by him for helping Pakistan obtain the $3 billion Standby Arrangement (SBA) from the IMF last year, which was about to be finalized.