Pakistan to return billions of loan to KSA

Islamabad, 8th November: Pakistan has decided to repay its loan $2 billion to Saudi Arabia.

According to sources, Pakistan might return the $2 billion Saudi Arabian loan and is looking for various options to secure more lending aimed at retaining gross official foreign exchange reserves at their current level of over $12 billion.

According to Finance Ministry sources, the second tranche of the $1 billion Saudi loans is due next month and it is likely that the government will repay the loan two years later.

The report said that Saudi Arabia’s aid to Pakistan, estimated at $6.2 billion, had helped Prime Minister Imran Khan’s government avoid volatility in its international debt obligations.

On the other hand, the Foreign Ministry said in a strong response, “It is a bilateral confidential matter,” said the Ministry of Finance in a terse response on Friday.

But a senior government official, speaking on condition of anonymity, said there was a possibility that Pakistan would return the money next month.

The prime minister made two trips to Saudi Arabia to secure the package, which allowed the PTI government to negotiate an agreement with the International Monetary Fund (IMF).

Saudi Arabia had agreed to provide a financial package worth $6.2 billion to Pakistan for three years. This includes $3 billion in cash aid and $3.2 billion in annual oil and gas supplies on deferred payments.

According to sources, the Central Bank of Pakistan has started formulating a strategy in this regard.

The government has also failed to restore the suspended 6 billion-dollar IMF program, making it difficult for foreign inflows to continue unhindered.

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