Business: Pakistan urges Saudi Arabia not to withdraw deposits and for oil facility to be extended

Saudi Arabia is discussing options including extending the term of a USD3 billion deposit with the State Bank of Pakistan, according to a joint statement issued after Pakistan Prime Minister Shehbaz Sharif’s recent meeting with Crown Prince Mohammed bin Salman. The Kingdom has also agreed to provide a ”sizable package” of USD8 billion to aid the debt-ridden economy, which has taken billions of dollars in loans from the likes of the World Bank, International Monetary Fund, China, and Saudi Arabia.

Pakistan has asked Saudi Arabia not to remove its central bank deposits and to continue its oil facility to the cash-strapped country. Miftah Ismail, Pakistan’s finance minister, said at a press conference in Karachi on Wednesday that Islamabad had requested that Riyadh extend an oil loan facility to Pakistan, which is considering rolling over dollar deposits as Islamabad seeks to control one of Asia’s highest inflation rates and avoid a current-account crisis.

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The Express Tribune reported that the Finance Minister lamented former Prime Minister Imran Khan’s government for making promises to the International Monetary Fund (IMF) which were ”against the interests of the nation”. ”Those promises are no less than landmines,” he told the media, adding that Khan had left the fastest growing inflation in the history of Pakistan.

According to the finance minister, corruption was rampant during the tenure of the Pakistan Tehreek-e-Insaf (PTI) government, which took historic loans during its tenure. ”Bushra Bibi’s friend Farah Gogi and Shehzad Akbar left the country immediately after the PTI’s government’s tenure came to an end,” he added.

The minister said the cricketer-turned-politician told the IMF that they would not take losses on diesel prices, adding that the former prime minister destroyed the China-Pakistan Economic Corridor (CPEC). ”Now, we are stuck with the promises the previous government made with the IMF.” He said the IMF delegation that had set out five major conditions for the revival of the USD 6 billion bailout package, including the reversal of fuel subsidies and the withdrawal of the tax amnesty scheme, would soon visit Pakistan.

Other conditions set by the organisation include an increase in electricity tariff, the imposition of new taxes and ensuring fiscal savings aimed at bringing down the projected primary budget deficit of Rs1.3 trillion to the earlier agreed limit of Rs25 billion surplus. According to the IMF, Pakistan owes billions of dollars to countries like China and Saudi Arabia, pushing the South Asian nation deep into a debt trap.

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