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Saudi Arabia mulls increasing Pakistan deposit amount to $5b

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2 years ago

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  • Sigh of relief for Pakistan as Saudi Arabia announces support.
  • Riyadh vows to help Islamabad steer crisis.
  • Develoment comes after Gen Munir’s meeting with Mohammad Bin Salman.

RIYADH: In a major boost to Pakistan’s efforts to strengthen its forex reserves amid the worsening currency crisis, Saudi Crown Prince Mohammad Bin Salman Tuesday directed the authorities to study increasing the amount of the deposit by $2 billion to reach $5 billion.

Last month, the Saudi Fund for Development (SFD) extended its term for the $3 billion deposit in the State Bank of Pakistan which was set to mature on December 5.

The SBP had signed an agreement with the SFD in November 2022 to receive $3bn, to be placed in the central bank’s account with an aim to improve its foreign exchange reserves.

According to a Saudi Press Agency (SPA) report today, Crown Prince Mohammad Bin Salman has directed the SDF to study increasing the amount of the deposit which has previously been extended on December 2, 2022 to hit a $5 billion ceiling, confirming the kingdom’s position supportive to Pakistan’s economy and its people.

“This came within the framework of the existing communication between HRH the Crown Prince and Muhammad Shehbaz Sharif, Prime Minister of Pakistan,” the SPA added.

The state news agency added that the Saudi leader has also directed to study augmenting Riyadh’s investments in Pakistan which have previously been announced on August 25, 2022 to reach $10 billion.

The announcement comes a day after Chief of Army Staff General Asim Munir’s meeting with Crown Prince Mohammad Bin Salman during his first overseas official visit to the country.

Pakistan is facing a currency crisis due to dwindling forex reserves which have slumped to $4.5 billion — enough for three weeks of imports.

On the other hand, Islamabad is making hectic efforts to revive the International Monetary Fund’s (IMF) loan programme stalled for months.

A Pakistani delegation held a meeting with the IMF officials in Geneva on Monday on the sidelines of the donors’ conference and reiterated its commitment to completing the programme.

Finance Minister Muhammad Ishaq Dar and IMF officials “discussed challenges to regional economies in the wake of climate change,” according to a Finance Ministry statement following the meeting’s conclusion.

“(The) finance minister reiterated the commitment to complete the Fund program,” it added.

The lender is yet to approve the release of $1.1 billion originally due to be disbursed in November last year, leaving Pakistan with only enough foreign exchange reserves to cover one month’s imports.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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