Pakistan receives $3 billion loan from Saudi Arabia

Pakistan on Saturday received a $3 billion loan from Saudi Arabia, the prime minister’s finance adviser said, as part of an economic support package.

The South Asian country has faced growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency, Reuters reported.

Pakistan’s total liquid foreign reserves stand at $22,498.8 million, based on central bank data.

Shaukat Tarin, finance adviser to Pakistan’s prime minister Imran Khan, said in a tweet: “I want to thank His Excellency Crown Prince Mohammed Bin Salman and Kingdom of Saudi Arabia for the kind gesture.”

The loan from Saudi Arabia will be for one year at a 4% interest rate under the terms of the package, which was signed last month, Reuters reported.

“This is positive news … and will help bolster both the foreign exchange reserves and sentiments in the forex market,” Saad Hashemy, executive director at BMA Capital said.

The loan comes a week after the International Monetary Fund agreed with Pakistan on measures needed to revive a stalled $6 billion funding program.