Saudi assistance will help Pakistan reduce IMF burden: PM Imran

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ISLAMABAD: Prime Minister Imran Khan on Wednesday said the assistance provided by Saudi Arabia has lessened the financial burden on Pakistan.

Khan said so while addressing the nation in order to take the people into confidence over his recent visit to Saudi Arabia and Pakistan’s political and economic situation.

He said they were thankful to Saudi Arabia for its help in a difficult time.

“We were trying to get loans from our friendly nations so we rely less and less on IMF,” the prime minister said in his address. “We are also in talks with other friendly countries.”

He said he was hoping to give the nation more good news in the coming days.

‘Pakistan to act as mediator in Yemen war’

Khan said that he will try to get Muslim countries together, besides acting as a “mediator” in resolution of conflicts between Muslim countries.

“We are trying our best to act as a mediator to resolve the Yemen crisis,” he said.

On Tuesday, the government struck a deal for a 12-month balance of payments lifeline with Saudi Arabia, which will deposit $3 billion with Pakistan’s central bank and provide a matching one-year deferred payment facility for oil imports.

According to a government statement, the visit by the premier to the kingdom resulted in significant understandings between the two countries.

Far-reaching decisions on bilateral economic and financial cooperation were also agreed during the meetings with Saudi leadership, it said.

“It was agreed that Saudi Arabia will place a deposit of USD 3 Billion for a period of one year as balance of payment support,” the statement said.

“It was also agreed that a one year deferred payment facility for import of oil, up to USD 3 Billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter.”

On his visit, the prime minister met with Saudi King Salman bin Abdul Aziz and Crown Prince Mohammad bin Salman, and attended the Future Investment Initiative (FII) conference where he launched a charm offensive targeting potential investors as Pakistan seeks to secure funds amid a yawning balance of payment crisis.

Hours after news of the $6 billion Saudi Arabia financial deal, Pakistani stocks climbed by more than four percent—the highest single day rise since June 2017.

The development also prompted the US dollar to drop by Rs1.89 or 1.4 percent against the Pakistani rupee in the interbank market, and by Rs 2. the open market.

Experts say the dip is likely to help reduce the burden on loans by Rs 179 billion for the Pakistani government.

Imran Khan’s government has also entered talks with the International Monetary Fund (IMF) as it seeks a potential bailout package to stem its balance of payment and current account deficits.

Analysts say the Saudi relief package will likely lessen the amount of funds the country will need to secure from the IMF.

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