Pakistan’s total liquid foreign reserves stand at $22,498 billion, based on central bank data.

Karachi:

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.

Pakistan has faced growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.

Pakistan’s total liquid foreign reserves stand at $22,498 billion, 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.

“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 programme.

The completion of the review, pending since earlier this year, would make available 750 million in IMF special drawing rights, or around $1 billion, bringing total disbursements so far to about $3 billion.

Pakistan’s central bank has raised its benchmark interest rate by 150 basis points to 8.75% to counter inflationary pressures.

Inflation had reached 11.5% in November, up from 9.2% a month earlier.

The Pakistani rupee, which closed on Friday at 176.77 at inter-bank against a dollar, has depreciated more than 11% since the start of this year.

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