ISLAMABAD: China and Saudi Arabia have assured Pakistan of a $13 billion financial package, pledging $8.8 billion for the current financial year 2022-23 and $4.2 billion thereafter.
This is in addition to sovereign debt reserves on deferred payment, additional rollovers, commercial loans, additional SWAPs and jacking of oil facilities as agreed by the International Monetary Fund (IMF).
Both the financial packages will ease Pakistan’s struggling economy as the State Bank of Pakistan currently has $8.9 billion in foreign currency reserves.
During recent visits, China and Saudi Arabia have assured Pakistani delegations led by Prime Minister Shahbaz Sharif that they will take care of Islamabad’s financial needs till June 2023. Come down to Rs 190 against the US dollar and nobody will be allowed to play with our exchange rate,” Finance Minister Ishaq Dar told a select group of journalists at his office on Friday, JEE News reported. .
The minister said that China has assured Pakistan that it will advance sovereign rollover deposits of $4 billion on all due dates. He said that the Chinese authorities also assured that $3.3 billion in commercial loans would also be provided on time. He said that China has also given the green signal to jack up the amount of SWAPS by providing an additional $1.45 billion, thus taking the total Chinese package to $8.8 billion for the current fiscal year. He said that the Bank of China has recently provided $200 million.
Pakistan and China have agreed to resume stalled work on Main Line 1 from Karachi to Peshawar, estimated to cost $9.8 billion, Dar said. He said that China has also agreed to provide financial support to Karachi Circular Railway (KCR). He believed that the cost of ML1 had increased from $6.3 billion to $9.8 billion due to unnecessary delays in its implementation under the PTI-led government. The Federal Minister said that the President and Prime Minister of China especially inquired about the well-being of the leader of Muslim League (N) Nawaz Sharif in this visit.
Elaborating on the outcome of the visit to Saudi Arabia, the minister said he considered Pakistan’s request for an additional $3 billion in reserves and jacking up the oil facility on an additional deferred payment of $1.2 billion. Assured. In addition, an additional amount of $4.2 billion will be considered by the KSA authorities.
KSA will also roll over $3 billion in existing reserves and a $1.2 billion oil facility ($100 million on a monthly basis) on their deferred payment will continue until June 2023, he said. So the total Saudi package is expected to reach $8.4 billion. In response to another question, the minister said that Saudi Crown Prince Mohammed bin Salman is going to visit Pakistan within this month.
He said that Saudi Arabia will also build a petrochemical complex in Gwadar with an estimated investment of 11 to 12 billion dollars. KSA had agreed in 2015 to build an oil refinery at an estimated cost of $6 billion and had offered to build it at the hub as Gwadar was not ready to provide the required infrastructure at the time. was
He said the government is also looking at offering potential investment opportunities to KSA, including the sale of RLNG-based power plants. Dar said the Asian Infrastructure Investment Bank (AIIB) is expected to approve $500 million as co-financing for ADB’s $1.5 billion BRACE program within the current month.
He said the government will also convene a meeting of the National Tax Council next week to approve GST harmonization on goods and services between the Center and provinces, which is on the way to approval of the World Bank’s $450 million RISE programme. The only obstacle is Another $500 million is owed to Sindh, so a total disbursement of about $1.4 billion from the WB was pending for GST harmonization for goods and services.
