Pakistan Returns US$1 Billion of Loan to Saudi

Islamabad, MINA – Pakistan returned a loan from Saudi Arabia of one billion US dollars, which is the second installment of a soft loan of billion US dollars. The Saudis provided Pakistan with US $ 3 billion in loans and US $ 3.2 billion in oil credit facilities at the end of 2018.

After Islamabad sought Riyadh’s support for India’s alleged human rights abuses in the disputed Kashmir region, the Saudis encouraged Pakistan to repay the loan.

Analysts say the Saudis are not used to pressing for refunds. But recently, relations between Pakistan and Saudi Arabia have been tense despite historically close friends.

“We have sent one billion dollars to Saudi Arabia. Another billion dollars will be paid to Riyadh next month,” said a Pakistani foreign ministry official as reported by Middle East Monitor on Thursday.

Last July, Islamabad returned one billion dollars to the Saudis.

A Pakistani finance ministry official said Pakistan’s central bank was in talks with a Chinese commercial bank. Pakistan did run a surplus of 1.2 billion dollars in current account balances and had a record $ 11.77 billion in remittances in the past five months.

It has also helped support Pakistan’s economy. But the return of the Saudi loan was a setback for Islamabad.

Therefore, by returning one billion Saudi dollars, Pakistan, which has 13.3 billion dollars in the central bank’s foreign exchange reserves, could face balance of payments problems after completing the next Saudi installments.

Under those circumstances, Pakistan approached China for commercial loans to help offset the pressure on paying another billion dollars to the Saudis next month.

“China came to our rescue,” said a Pakistani foreign ministry official. (T/RE1)

Mi’raj News Agency (MINA)