Third $1 billion deposit received from Saudi Arabia: State Bank
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The State Bank of Pakistan (SBP) on Friday confirmed that Pakistan has received a third and last $1 billion tranche as part of balance-of-payments support from Saudi Arabia.
Saudi Arabia in October last year had stepped forward with a $6 billion bailout package — $3bn in foreign currency support and another $3bn in deferred payments on oil imports — for Pakistan’s ailing economy.
The country’s current account deficit rose to $7.9bn in the first half of the current fiscal year and is likely to reach $16-18bn by June 30.
Pakistan had seen some relief after the first tranche of $1bn from Saudi Arabia was received on November 9 but the amount had run out by December's first week. A second $1bn deposit from the Kingdom had followed in December.
The money comes a day after the central bank received $1bn from the United Arab Emirates (UAE) following an agreement with the Abu Dhabi Fund for Development (ADFD) in Abu Dhabi on Jan 22.
Finance Minister Asad Umar while presenting the mini-budget in the parliament on Wednesday had remarked that the government may enter into an International Monetary Fund-led programme. However, he also said that the government was not in a hurry as it was considering other options including bilateral support.
Funds from Saudi Arabia and the UAE have had no impact on the exchange rate; however, a slight change was observed in the open-market following SBP’s agreement with the UAE. “The fluctuation of 20-30 paisa does not matter but the situation has improved and will improve with more inflows from the UAE,” President Forex Association of Pakistan Malik Bostan told Dawn.
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Comments (50) Closed
Jan 25, 2019 04:15pm
A friend in need, is a friend indeed. Thanks for being a true and dedicated friend of the fertile land and 225 million hardworking and intelligent people of the Islamic Republic of Pakistan. Keep it up and hang on tough.
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Jan 25, 2019 04:23pm
Pakistan welcomes this gesture. It will help to support dwindling foreign reserves. However, these financial help from brother and time tasted friends are short terms measures. Pakistan need long terms financial supports and long terms plans as well as increase in exports. Cutting imports is no solution or levying high import duty. Pakistan needs to check slow rate of growth and industrialization.
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Jan 25, 2019 04:35pm
Nie job, We dont need to go to imf anymore and IK can keep the promise.
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Jan 25, 2019 04:37pm
PM IK is making the world come to Pakistan.
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Jan 25, 2019 04:56pm
Surprised that the whole nation is not asking to be shown a copy of the agreement under which this amount was given. What’s there to hide?
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Jan 25, 2019 05:10pm
PMIK got economic packages from KSA,UAE,Qatar and PRC.Also visited Malaysia and Turkey. Who's left now?
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Jan 25, 2019 05:13pm
Celebration time in Pakistan!!!
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Jan 25, 2019 05:37pm
Wait when finally Saudi Arabia will ask in return.
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Jan 25, 2019 05:43pm
PM needs to make sure the accounting this money is very transparent and in the hands of absolutely non-corrupt people.
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Jan 25, 2019 05:46pm
There is no such thing as a free lunch!
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Jan 25, 2019 05:49pm
Can somebody please explain how and when this loan will be paid back, on what conditions was this money given ? If anyone thinks that the Saudis are so charitable, then they are living in a dream world.
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Jan 25, 2019 06:14pm
@Dr. Salaria, Aamir Ahmad, Your arguement defies logic.
Why would a fertile land with hardworking , intelligent people require loan. Please elaborate further.
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Jan 25, 2019 06:15pm
This infusion augmented FC reserve to $8.4 billion. This includes the $ from commercial banks ie $6.6 billion. Don't add $ from commercial banks twice to show it as $14.3 billion. One who is truthful to facts can only overcome difficulties. Not otherwise.
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Jan 25, 2019 06:24pm
Money pouring in.
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Jan 25, 2019 06:24pm
Thanks Saudia. This is how good and trusted friends help each other.
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Jan 25, 2019 06:27pm
A friend who helps in need is a good friend indeed. All muslim countries should help each other in their hour of needs. They are stronger when united. United they stand, while divided they may fall.
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Jan 25, 2019 06:34pm
So, now what Pakistan has to do for Saudi Arabia in return?
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Jan 25, 2019 06:34pm
How many of you are aware that all this amount adds to circular debt. It's not a achievement to get a loan especially when conditions and motives are not revealed to public.
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Jan 25, 2019 06:36pm
Congratulations!!
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Jan 25, 2019 06:41pm
Imran Khan has done well.
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Jan 25, 2019 06:49pm
One of the PTI key election narratives was excessive debt and deficit. Again nothing has been introduced to address these issues. Debt and deficit both are on the rise at record level. Debt that was once the unforgivable offensive in old Pakistan has now become some thing to glorify- more loans more glorification.
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Jan 25, 2019 06:52pm
Many thanks to the rulers of Saudi Arabia.
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Jan 25, 2019 06:56pm
@Reji, Let's start with the Indian union deal with French Rafael fighter deal. Was that shown to the people. Corruption was exposed yet not shown.
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Jan 25, 2019 06:58pm
@Prateik, And how many offered your PM anything. Zilch. Modi has sneakily gone to ADIB , a Chinese bank for $5billion load.
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Jan 25, 2019 07:12pm
Just came to know that the interest rate for the deposits is 3%.
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Jan 25, 2019 07:24pm
Celebrating a loan? Sad!
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Jan 25, 2019 07:26pm
Does the PTI government has any long term plans for overcoming from the economic woes? The current arrangement is just to boost the current account deficit, this is just a short term measure, it is like giving medicine for short term cure while the decease remains intact.
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Jan 25, 2019 07:28pm
@Haryanavi_chora, "Celebration time in Pakistan!!!"
What time it is in India bro?
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Jan 25, 2019 07:32pm
Shameful.
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Jan 25, 2019 07:33pm
@Fastrack, - "PM IK is making the world come to Pakistan."
Errr...taking alms is not exactly termed as World coming to Pakistan. These are not my words. These are Imran Khan's own words. See his old speeches.
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Jan 25, 2019 07:41pm
@Zak,Every one borrows money but they have the capacity to pay also.In India we borrow when we have $395bn reserves.We don,t delay paying back.
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Jan 25, 2019 08:18pm
@Yousuf , 3% per month.
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Jan 25, 2019 08:34pm
@Ahmed , very precisely said.
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Jan 25, 2019 08:53pm
@Yash, Not your concern, mind your own country's business.
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Jan 25, 2019 09:13pm
Tremendous blow from the PTI government considering the friends help either of IMF Great Foregin policy
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Jan 25, 2019 09:14pm
Great. It will be marvellous if the looted money is retrieved.
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Jan 25, 2019 09:41pm
@Pakistan, exactly
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Jan 25, 2019 10:01pm
How long can a nation survive on borrowed time!
Sad and tragic
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Jan 25, 2019 11:26pm
I dont know why I believe this that this is the only government after Musharraf who I think will come out of this and leave with a strong economy and FR for Zardari and Nawaz to come back and enjoy another 10 years of looting. Sad but true. Self inflicted damage.
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Jan 25, 2019 11:46pm
All the money is taken to China in repayment
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Jan 26, 2019 12:30am
@Khurram, that’s what we call ‘LOAN’
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Jan 26, 2019 02:31am
When do these massive unaffordable deposits become repayable and what interest rates? Please tell the country.
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Jan 26, 2019 02:34am
@Dr. Salaria, Aamir Ahmad, Only ignorant people support stupid decisions. Have you not asked the PTI government to explain when these deposits will need to be returned and what is the cost of the deposit? No such thing as a free Muslim Kebab lunch.
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Jan 26, 2019 02:34am
Pakistan has the potential of becoming a trillion dollar economy if all cylinders start firing . We are a nation of 25 corore..with over a million pakistanis living aboard.. just increase exports..decrease imports.. end corruption... .recover 50 percent of looted wealth if not atall..and talk to saudia and gulf states to import pakistani labor to drive up foreign remitance... and collect tax from all the wealthy and u will see that we will be one of the fastest growing economies in the world once again.. like we were during musharraf time..
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Jan 26, 2019 03:18am
Money coming and government spending it fast and reserves are still same as four months ago before money came. This may rescue for 6 more months and then what?
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Jan 26, 2019 03:45am
It would be great to see the money used to move the country forward and uplifting the living of the poor and down trodden. At least Pakistan does not have to ask the IMF.
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Jan 26, 2019 03:54am
@khan, "Nie job, We dont need to go to imf anymore and IK can keep the promise."
Are you sure? Why then is Asad Umar still negotiating with IMF? Also are you aware that Saudi money cannot be used to pay for exports? Are you aware that after receiving $2 billion from Saudis, Pakistan's reserves on January 18, 2019 were just $6.6 billion? Are you aware that Saudi money will have to be returned after one year from the time you received it?
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Jan 26, 2019 07:49am
No meal is free!
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Jan 26, 2019 12:08pm
@Dr. Salaria, Aamir Ahmad,
True IOU in public's head.. sure a friend..
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Jan 26, 2019 12:18pm
@Prateik, These are not "economic packages" but loans on high interest rates and to be repayed in a stipulated time.
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