Saudi Arabia comes to Pakistan’s aid with loan finance deal

26 Oct 18

Saudi Arabia has agreed to a $6bn rescue package for Pakistan to help it deal with debt problems.

The package includes $3bn in foreign currency support for a year and a further loan worth up to $3b in deferred payments for oil imports to help stave off a current account crisis, Pakistan’s government said.

The loans could reduce any bailout package Pakistan receives from the International Monetary Fund, with whom it is currently engaged in talks. 

The announcement follows Pakistan’s prime minister Imran Khan trip to Saudi Arabia where he publicly announced that he was still looking for loan finance from “friendly governments”.

Speaking at the Investment Initiative forum in Riyadh, Khan pleaded for investment in Pakistan, after seeking help from the IMF earlier this month.

He said: “What we are hoping is that we do a bit of both, get a loan from IMF, and other loans from friendly governments.”

It is the prime minister’s second trip to Saudi Arabia since he was elected in July. Khan told the forum that Saudi crown prince Mohammed bin Salman will organise a delegation of businessmen to invest in Pakistan.

The forum has been boycotted by many participants following the murder of Saudi journalist Jamal Khashoggi at the country’s consulate in Istanbul.

But in an interview with the Independent on his way to the conference, Khan said his country was “desperate” for help to deal with “the worst debt crisis in our history”.

He said if Pakistan did not get financial help, it would have “real, real problems”.

Earlier this month, IMF managing director Christine Lagarde confirmed that Pakistan’s finance minister had asked the fund for help. She said an IMF team would go to Islamabad “in the coming weeks” to begin talks about the possibility of a bailout loan.

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