Pakistan, Saudi Arabia to discuss extension of loan of $3 billion

Pakistan, Saudi Arabia to discuss extension of loan of $3 billion.

Pakistan and Saudi Arabia said on Sunday that they would discuss extending the terms of a $3 billion loan to help Islamabad's faltering economy. The Gulf country has long been an intelligence partner of Pakistan as well as a regular source of financial relief for successive governments.

The latest sign of support comes after a visit by new Prime Minister Shahbaz Sharif to Saudi Arabia, who has inherited a crippling national debt, galloping inflation and a weak rupee. A joint statement said the state would continue to support the Pakistani economy and had discussed "raising a $3 billion deposit with the central bank through term extension or otherwise".

Saudi Arabia also promised to "further increase financing of petroleum products" at a time when the South Asian country is suffering from frequent power cuts.

The statement comes after recent talks between Pakistan and the International Monetary Fund (IMF) on the release of funds under the existing $6 billion aid programme, which had stalled due to concerns about the pace of reforms. The cash-strapped country's foreign exchange reserves fell below $11 billion last month.

"The little financial help we can get from any country will help us, given the state of our economy," Dr Kaiser Bengali, a veteran economist, told AFP. "But for how long will we run our economy on debt? This policy is not going to work even for the next five years."

In recent years, Saudi Arabia has provided $4.2 billion in aid to Pakistan in the form of $3 billion in loans deposited with the central bank, as well as $1.2 billion in deferred oil payments. Pakistani Finance Minister Mifta Ismail, who had stayed in Saudi Arabia for "technical level talks", was due to return to Pakistan on Sunday evening.

Source by internet.

Created by MOHAMMAD SHOAIB.