Pakistan has returned $1 billion to Saudi Arabia as a second installment of a $3 billion soft loan, as Islamabad reaches out to Beijing for a commercial loan to help it offset pressure to repay another $1 billion to Riyadh next month, officials said. Analysts say it is unusual for Riyadh to press for the return of money. But relations have been strained lately between Pakistan and Saudi Arabia, usually historically close friends. With the $1 billion flowing out, Pakistan, which has $13.3 billion in central bank foreign reserves, could face a balance of payments issue after clearing the next Saudi installment. “China has come to our rescue,” a Foreign Ministry official told Reuters. A finance ministry official said Pakistan’s central bank was already in talks with Chinese commercial banks. “We’ve sent $1 billion to Saudi Arabia,” he said. Another $1 billion will be repaid to Riyadh next month, he said. Islamabad had returned $1 billion in July. Although a $1.2 billion surplus in its current account balance and a record $11.77 billion in remittances in the past five months have helped support the Pakistani economy, having to return the Saudi money is still a setback. Saudi Arabia gave Pakistan … Continue reading Pakistan refunds $1 billion of Saudi Arabia loan