A deposit agreement between the Kingdom of Saudi Arabia, represented by theSaudi Fund for Development (SFD), and the Government of the IslamicRepublic of Pakistan, represented by the State Bank of Pakistan (SBP), hasbeen signed today by the Chief Executive Officer of SFD, H.E. Sultan BinAbdulRahman Al-Marshad, and the Governor SBP, Dr. Reza Baqir, at the StateBank of Pakistan in Karachi, Pakistan.
Under this deposit agreement, SFD shall place a deposit of $3 billion withSBP. The deposit amount under the agreement shall become part of SBP’sForeign Exchange Reserves. It will help support Pakistan’s foreign currencyreserves and contribute towards resolving the adverse effects of theCOVID-19 pandemic.
The deposit agreement reflects the strong and special relationship betweenthe Kingdom of Saudi Arabia and Pakistan and will further augment theeconomic ties between the two brotherly countries.
Besides deposits of $3 billion, Pakistan’s government has been in talkswith the Saudi government for importing oil on deferred payment to the tuneof $1.2 billion, which means the payment against oil import will be made tothe Saudi government in the later months.
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The overall financial support from the Saudi government, along with over $1billion tranches from International Monetary Fund (IMF), will give acushion to foreign exchange reserves of the country, which witnessedconsistent outflows of the Dollar on account of payment of debt services.
The fresh inflows from various sources will improve the level of foreignexchange reserves and Rupee parity against the Dollar, which is expected todrop below 170 as per forecast by various experts.
