Business

China, Saudi Arabia to provide $13bn financial package: Dar

Published

2 years ago

Farwa

China, KSA will provide additional amount of $8.8bn and $4.2bn, respectively.
During PM’s recent visits, China, KSA assured to take care of Islamabad’s financial requirements till June 2023, says Dar.
China assured Pakistan that they would roll over $4 billion sovereign rollover deposits on all coming due dates, says Dar.

ISLAMABAD: China and Saudi Arabia have assured Pakistan of providing a financial package of $13 billion, with the former pledging $8.8 billion and latter $4.2 billion for the current fiscal year 2022-23.

This is in addition to the rollover of sovereign loan deposits, additional rollovers, commercial loans, additional SWAPS and jacking up oil facilities on deferred payment in line with the International Monetary Fund (IMF) agreement.

Both financial packages will ease the struggling economy of Pakistan as the foreign currency reserves held by the State Bank of Pakistan stand at $8.9 billion at the moment.

“China and Saudi Arabia have given assurances to Pakistani delegations under Prime Minister Shehbaz Sharif during recent visits that they will take care of Islamabad’s financial requirements till June 2023. Now the real effective exchange rate (REER) in terms of rupee against the US dollar has come down to Rs190 against the US dollar and no one will be allowed to play with our exchange rate,” Finance Minister Ishaq Dar told a select group of reporters in his office on Friday, The News reported.

The minister said that China assured Pakistan that they would roll over $4 billion sovereign rollover deposits on all coming due dates. The Chinese authorities, he said, also assured that the commercial loans of $3.3 billion will also be provided in due course of time. He said that China also granted a green signal for jacking up the SWAPS amount by providing an additional $1.45 billion so the total Chinese package would go up to $8.8 billion for the ongoing financial year. The Bank of China, he said, had already provided $200 million recently.

Dar said Pakistan and China agreed to resume the halted work on Mainline-1 from Karachi to Peshawar, which would be constructed at an estimated cost of $9.8 billion. He said that China also agreed to finance Karachi Circular Railway (KCR). He was of the view that the cost of ML-1 had gone up from $6.3 billion to $9.8 billion because of unwarranted delay in its execution during the tenure of PTI led regime. The minister said that China’s president and prime minister especially inquired about the health of PML-N leader Nawaz Sharif during this visit.

Sharing details about the outcome of Saudi Arabia’s visit, the minister said that they also assured to consider Pakistan’s request for additional $3 billion in deposits and jacking up the oil facility on deferred payment by an additional $1.2 billion. Besides, an additional amount of $4.2 billion would be considered by KSA authorities.

He said that KSA would also roll over existing deposits of $3 billion and their oil facility of $1.2 billion on deferred payment ($100 million on monthly basis) would continue till June 2023. Therefore, the total Saudi package is expected to touch $8.4 billion. To another query, the minister said that Saudi Crown Prince Muhammad Bin Salman is going to visit Pakistan within the ongoing month.

He said that Saudi Arabia would also construct a Petrochemical Complex in Gwadar at an estimated investment of $11 to $12 billion. It was agreed with the KSA in 2015 that it would construct an oil refinery at an estimated cost of $6 billion and he had offered to construct that in Hub because at that time Gwadar was not ready for providing the required infrastructure.

He said the government was also considering offering potential investment opportunities to KSA, including selling RLNG-based power plants. Dar said that the Asian Infrastructure Investment Bank (AIIB) was expected to approve $500 million as co-financing of ADB’s BRACE programme of $1.5 billion within the ongoing month.

He said the government would also convene a National Tax Council meeting next week for approving the GST harmonisation on goods and services among the Centre and the provinces, which is the only stumbling block in the way of approving $450 million RISE programme of the World Bank. There is another $500 million loan for Sindh, so the total disbursement of approximately $1.4 billion from WB was awaiting on harmonisation of GST for goods and services.

Business

The amount of trade between Saudi Arabia and Pakistan hits $700 million.

Published

4 hours ago

Farwa

Through the Special Investment Facilitation Council (SIFC), Pakistan’s trade connections with Saudi Arabia have grown significantly, with bilateral trade volume rising from $546 million to $700 million and exports to the Kingdom growing by 22%.

As bilateral economic cooperation continues to grow, Saudi investors have shown a strong interest in Pakistan’s construction, energy, agricultural, and information technology sectors. The objective for exporting IT services between the two countries has been raised from $50 million to $100 million.

Saudi Arabia has set up a help desk dedicated to making it easier for Pakistani IT companies to register in the Kingdom in order to expedite commercial procedures. The goal of this program is to speed up economic collaborations between the two countries and lower administrative barriers.

The well-known Saudi restaurant chain AlBaik has revealed plans to open locations in Pakistan, which is a big step for the food service industry and should lead to the creation of new job possibilities in the area.

Officials have noted that stronger business links between the two countries lead to greater economic stability, and the SIFC has played a crucial role in promoting these trade advancements. For bilateral trade and investment projects, the Council remains a crucial facilitator.

According to a trade official with knowledge of the developments, “the establishment of dedicated support mechanisms, such as the help desk for IT companies, demonstrates a commitment to long-term economic partnership,” The goal of these programs is to improve the conditions for commercial collaboration between the two nations.

The increasing amount of trade and the diversity of investment sectors show that Saudi Arabia and Pakistan’s economic ties are changing as both countries seek to deepen their business alliances in a number of industries.

Business

After more than 50 years, Bangladesh and Pakistan resume direct trade.

Published

4 hours ago

Farwa

After more than 50 years, the two governments will resume direct bilateral trade, with Bangladesh’s food ministry announcing Sunday that it will receive a supply of 25,000 tonnes of rice from Pakistan next month.

After former Prime Minister Sheikh Hasina was overthrown last August, relations between Bangladesh and Pakistan have begun to improve after decades of tense relations.

Since then, there have been increased bilateral interactions between Bangladesh and Pakistan. Nobel laureate Muhammad Yunus, the interim government’s senior adviser, has met twice with Pakistani Prime Minister Shehbaz Sharif.

According to the food ministry, Dhaka completed an agreement earlier this month to import grains from Pakistan.

“On March 3, the first shipment of 25,000 tonnes will reach Bangladesh,” Zia Uddin Ahmed, a ministry assistant secretary, told Arab News.

“This is the first time that Bangladesh has started importing rice from Pakistan at the government-to-government level since 1971.”

Following direct maritime contact between the two South Asian countries in November—a Pakistani cargo ship stopped in Bangladesh for the first time since 1971 with imports and exports arranged by private companies—their trade relations grew.

Resuming trade with Pakistan is a significant step for Bangladesh, according to Amena Mohsin, a lecturer at North South University and a specialist in international relations.

“We want to see progress in our bilateral relationship with Pakistan. Most significantly, we are currently going through a low point dispute with India, even though we constantly diversify our partnerships.

This most recent move to purchase rice from Pakistan is really significant in this context,” she told Arab News.

Business

The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

Published

3 days ago

Farwa

As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.