Business News Business Article Business Journal Pakistan receives $3 billion loan from Saudi Arabia

© Reuters. FILE PHOTO: Saudi Arabia’s Crown Prince Mohammed bin Salman meets with Pakistani Prime Minister Imran Khan in Riyadh, Saudi Arabia, October 15, 2019. Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS

By Syed Raza Hassan

KARACHI, Pakistan (Reuters) – Pakistan on Saturday acquired a $3 billion loan from Saudi Arabia, the high minister’s finance adviser said, as segment of an financial improve equipment.

The South Asian country has confronted rising financial challenges, with excessive inflation, sliding foreign places exchange reserves, a widening present story deficit and a depreciating foreign money.

Pakistan’s full liquid foreign places reserves stand at $22,498 billion, per central bank knowledge.

Shaukat Tarin, finance adviser to Pakistan’s high minister Imran Khan, said in a tweet: “I are looking to thank His Excellency Crown Prince Mohammed Bin Salman and Kingdom of Saudi Arabia for the form gesture.”

The loan from Saudi Arabia shall be for one one year at a 4% passion rate below the terms of the equipment, which used to be signed final month.

“Here’s particular news … and might perhaps perhaps perhaps abet bolster each the foreign places alternate reserves and sentiments in the foreign places exchange market,” Saad Hashemy, govt director at BMA Capital said.

The loan comes a week after the World Monetary Fund agreed with Pakistan on measures fundamental to revive a stalled $6 billion funding programme.

The completion of the review, pending since earlier this one year, would obtain on hand 750 million in IMF particular drawing rights, or around $1 billion, bringing full disbursements to this level to about $3 billion.

Pakistan’s central bank has raised its benchmark passion rate by 150 basis aspects to 8.75% to counter inflationary pressures.

Inflation had reached 11.5% in November, up from 9.2% a month earlier.

The Pakistani rupee, which closed on Friday at 176.77 at inter-bank in opposition to a dollar, has depreciated bigger than 11% for the reason that launch of this one year.

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