ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin announced on Saturday that the State Bank of Pakistan (SBP) had received Saudi Arabia’s $3 billion deposit and thanked the kingdom and its crown prince for the “kind gesture”.
“Good news, $3bn Saudi deposit received by SBP. I want to thank His Excellency Crown Prince Mohammed Bin Salman and [the] kingdom of Saudi Arabia for the kind gesture,” the adviser tweeted.
The agreement was reached during Prime Minister Imran Khan’s visit to the kingdom in October. Apart from the support package, Saudi Arabia had also agreed to provide $1.2bn worth of oil supplies on deferred payments.
The deal cleared its last legal hurdle last month when its summaries were approved by the prime minister and the cabinet.
On Monday, the SBP signed the agreement with the Saudi Fund for Development to receive the amount, which would be placed in the SBP’s account with an aim to improve its foreign exchange reserves.
When the SBP was officially contacted to know the agreed rate of return on the Saudi fund as there were massive speculations in the financial market about the rates being given on $3bn, it had stated: “As per agreement all terms are confidential and cannot be revealed without the consent of both the parties.”
The issued press release had further stated the fund would help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the Covid-19 pandemic.
The SBP said the deposit agreement reflected the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and would further augment the economic ties between the two brotherly countries.
Meanwhile, Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin on Friday tried to allay fears over the state of the economy and said that Pakistan’s exports and remittances will help to reduce the country’s trade gap.
Tarin’s press conference comes after the trade deficit saw a steep rise of 162.4 per cent during November, driven largely by a more than triple increase in imports compared to exports.
This caused the Pakistan Stock Exchange’s benchmark KSE-100 index to bleed 2,134.99 points or 4.71 per cent to close at 43,234.15 points. The benchmark lost the highest number of points in a day since March 2020.
Simultaneously, the dollar appreciated further to set a new record on Thursday, closing at Rs176.42 after gaining 94 paisa.
In addition, inflation during the month of November edged up to 11.5pc from 9.2pc, the highest increase noted in the past 20 months.
Speaking to the media in Islamabad alongside Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood, Tarin said that the current inflation in the country was “imported”.
“India is also facing the same situation. Their trade deficit is $20 billion today compared to $10bn ten years ago. And the reason for that is price escalation,” he said.
He said that 72pc of the increase in petrol prices could be attributed to an escalation in global prices. He added that the Covid-19 pandemic also had an impact. “Once global prices stabilise, the disequilibrium will also get fixed.”
Tarin stated that the government often uses the phrase “Ghabranay ki baat nahin hai” (there is nothing to worry about) as it is necessary to see where the country’s economic fundamentals are heading. “Our economic fundamentals are growing perfectly.”
Speaking on the occasion, Dawood highlighted that the country’s exports in Nov stood at $2.9bn while a month ago it was $2.7bn. “Hopefully In December our exports will reach $3bn,” the adviser added.