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Saudi Arabia vows to help Pakistan’s finances ‘as much as it can’

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2 years ago

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  • Saudi finance minister says kingdom will help Pakistan’s finances.
  • Reserves fall below $7bn for first time since Jan 2019.
  • Earlier this month, Saudia Arabia extended term of $3bn deposit.

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

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

In order to bolster its relationships, the kingdom has taken several steps to provide financial support to Pakistan as the cash-strapped nation desperately seeks support from international partners.

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.

The finance minister also shared that Riyadh was also looking to do more investments in Egypt and is planning to start doing deals in Turkey.

“Our relationship with Turkey is improving greatly, and we hope to have investment opportunities,” he said. 

“We have started investing aggressively in Egypt and we will continue to look at investment opportunities and that is more important than deposits. Deposits can be pulled but investments stay.”

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.

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Business

Robust activity lets PSX climb above 115,000 level again.

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On Friday, the Pakistan Stock Exchange (PSX) resumed its upward trend, crossing 115,000 points once more.

The PSX had strong action in the morning session, as the KSE-100 index increased by 1,000 points to 115,138.

The notoriously volatile PSX closed Thursday at 114,037 points, up 594 points.

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Meanwhile, in the interbank market this morning, the US dollar fell 7 paisas to Rs278.65 against the Pakistani rupee.

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SBP will announce monetary policy on January 27.

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The State Bank of Pakistan (SBP) will release its monetary policy on Monday.

The Monetary Policy Committee (MPC) of the SBP will convene on the first day of the following week to make decisions on monetary policy.

The Monetary Policy decision will be announced by Governor SBP Jameel Ahmad at a news conference on the same day after the MPC meeting, according to an official release.

In December, the central bank reduced policy rates by 200 basis points (bps) to 13 percent.

“In November 2024, headline inflation fell to 4.9 percent year on year, meeting the MPC’s estimates. This decrease was mostly caused by the ongoing decline in food inflation and the phasing out of the impact of the gas tariff increase in November 2023,” SBP stated in an official release.

“However, the Committee noted that core inflation, at 9.7 percent, is proving to be sticky, while consumer and business inflation expectations remain volatile.” To that end, the Committee restated its previous assessment that inflation may remain volatile in the short term before stabilizing within the target range.

“At the same time, growth prospects have slightly improved, as evidenced by a recent increase in high-frequency indicators of economic activity.” Overall, the Committee concluded that its approach of gradual policy rate decreases is keeping inflationary and external account pressures under control while promoting long-term economic growth.

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Finance Minister Meets With World Leaders at World Economic Forum in Davos

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During his attendance at the World Economic Forum in Davos, Switzerland, Finance Minister Muhammad Aurangzeb has met with officials of organisations and leaders of many nations.
Bangladesh’s Chief Advisor, Muhammad Younas, met with Mohammad Aurangzeb.
On the fringes of the World Economic Forum’s Annual Meeting 2025 Opening Banquet, there was an informal meeting.
Additionally, the Finance Minister met with Anwar Ibrahim, the Prime Minister of Malaysia.
Both leaders discussed economic cooperation and bilateral ties.
Muhammad Aurangzeb also had a meeting with Dp World’s Rizwan Soomro and Yuvraj Narayan.
They talked about how to strengthen Pakistan’s logistics and infrastructure systems to support trade.
“The Pakistani government is committed to advancing joint projects and values partnerships in both business-to-business and business-to-government cooperation,” the finance minister added.

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