Saudi Arabia mulls over $10b investment in Pakistan, $5b deposit

In a major boost to the cash-starved country, Saudi Arabia’s Crown Prince Mohammed bin Salman directed to study increasing the kingdom’s investments in Pakistan to $10 billion.

He also directed the Saudi Fund for Development (SFD) to study increasing the Saudi deposit to Pakistan’s Central Bank to reach $5 billion.

The investments in Pakistan were previously announced in August last year while the Saudi deposit to the country’s central bank was extended in December.

According to the Saudi Press Agency (SPA) which reported on early Tuesday, the directives from Crown Prince Salman – commonly known as MBS – affirms the kingdom’s position in supporting the economy of Pakistan and its people.

It comes within the framework of the existing communication between the crown prince and Prime Minister Shehbaz Sharif, the SPA added.

Last month, the SFD had extended the term for the $3 billion deposit in the State Bank of Pakistan (SBP) which was set to mature on December 5.

The SBP had signed an agreement with the SFD in November 2022 to receive $3 billion, to be placed in the central bank’s account with an aim to improve the country’s foreign exchange reserves.

Gen Asim Munir meets MBS

The latest announcement comes a day after Chief of Army Staff Gen Asim Munir met with MBS during his first overseas official visit since assuming the command of Pakistan Army in late November.

Gen Asim had reached Saudi Arabia last week as part of an official visit to the Middle East to boost bilateral relations and cooperation.

The announcement was made by the Inter Service Public Relations (ISPR) which said the army chief would visit Saudi Arabia and the United Arab Emirates from January 4 to 10.

It said Gen Asim Munir would meet senior leadership of the two countries and discuss matters of mutual interests, military-to-military cooperation and bilateral relations focusing on security-related subjects.

Earlier, Finance Minister Ishaq Dar had also said that Saudi Arabia and China were set to boost Pakistan’s foreign exchange reserves much before the close of this month.

“Our foreign exchange reserves by end-June would be much better than you can think,” he told a press conference in Islamabad.

He said the IMF programme would be completed at all costs, China and Saudi Arabia would enhance their support, government-to-government disinvestments would be completed, and the current account deficit would be about $3 billion less than earlier projections.

Dar recalled that China and Saudi Arabia, during Prime Minister Shehbaz Sharif’s visits in September,  had agreed to increase their support to Pakistan, and the Saudi finance minister later confirmed this to international news agencies.

He said the process got delayed, but Saudi Arabia would increase its support much earlier than the end of this month, while the Chinese loan rollover was also being processed.

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