Pakistan on Wednesday requested Saudi Arabia to urgently provide $3 billion in cash after its foreign exchange reserves fell to a critically low level, as the new army chief was also expected to play a role in bagging the bailout during his upcoming maiden visit to the Kingdom.

Finance Minister Ishaq Dar made the request during a meeting with Nawaf bin Said Al-Malki, the Saudi ambassador, according to his ministry’s officials.

It was the second consecutive day when the finance minister held meetings with foreign diplomats in his efforts to seek their financial support and also influence the International Monetary Fund (IMF) to soften its stance on releasing its $1.2 billion tranche to the country.

Dar’s request for the cash bailout of $3 billion was over and above the same amount of money rollover of the previous debt.

However, there is an urgency of the matter, as the country’s foreign exchange reserves have fallen below the $7 billion level for the first time since January 2019.

The current reserves stand at around $6.7 billion, which is almost equal to $6.6 billion on January 18, 2019.

The $6.7 billion reserves are not enough to service the $8.8 billion principal and interest payments during the January-March period of the current fiscal year, according to the sources.

Dar thanked the ambassador for extending the term of a $3 billion deposit in the State Bank of Pakistan (SBP) by the Saudi Fund for Development (SFD), according to the finance ministry’s news statement.

In the first week of November, the finance minister had said Pakistan received “assurances of a $13 billion financial package from China and Saudi Arabia, including $5.7 billion in fresh loans”.

They included $4.2 billion from Saudi Arabia and $8.8 billion from China.

However, no progress could be made during the past one month and instead the country paid back two commercial loans of China, totalling $1.2 billion.

The $13 billion package is equal to 38% of the estimated gross external financing requirements of the country for the fiscal year 2022-23.

Its materialisation can eliminate the threat of default, as the IMF has not come up with a major financial package despite imposing numerous harsh conditions.

The sources said during the meeting it was also discussed that the new Chief of Army Staff (COAS), General Syed Asim Munir, would soon visit the Kingdom.

The military leadership would also take up the cash injection issue, it emerged after the meeting.

The news statement underlined that the finance minister informed the ambassador of Saudi Arabia about the ongoing post-flood reconstruction and rehabilitation programme.

During the meeting, both sides discussed the possibility to augment the current $1.2 billion Saudi oil facility on deferred payments.

There were also discussions on the $1 billion Saudi investment in Pakistan, according to the officials.

Pakistan is again looking towards the friendly countries as it has been unable to revive the $6.5 billion IMF bailout package – derailed for the fourth time in three years.

The IMF has not yet finalised the dates for the staff-level talks – much needed to acquire the next loan tranche of $1.2 billion.

Pakistan and the IMF teams on Wednesday held discussions about the practicality of the official estimates of $32 billion foreign inflows during the current fiscal year.

The discussions mainly focused on the $26 billion inflows estimates by the finance ministry, according to the sources.

The estimates included budgetary loans of $23 billion and grants of $1.5 billion, according to government sources.

Pakistan has estimated that it would receive $6.2 billion in foreign commercial loans, down from the previous estimate of $7.5 billion.

This money was not received during the first quarter.

Of the estimated foreign commercial loans of $6.2 billion, $3.5 billion will come from China.

The remaining $2.7 billion will be provided by the non-Chinese foreign commercial banks having shorter maturity periods.

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