Bloomberg said on Thursday that Saudi Arabia will help and support Pakistan’s financial situation as it seeks to strengthen relationships with nations that are struggling due to inflation. Mohammed Al Jadaan, the finance minister of Saudi Arabia, made the remarks during a press conference in Riyadh. He claimed that the Saudi government will “continue to support Pakistan as much as we can.” The KSA has taken many initiatives to extend financial support to Pakistan in a bid to improve its partnerships as the cash-strapped nation desperately seeks support from foreign allies. The Saudi Arabian finance minister also revealed that Riyadh was looking to increase its investments in Egypt and was preparing to begin signing contracts in Turkey.
He stated that “our relationship with Turkey is substantially developing, and we hope to have investment prospects.”
“We quickly began investing in Egypt, and we will continue to hunt for investment possibilities. Investment opportunities are more crucial than deposits. Deposits may be withdrawn, but investments are not.
$3 billion deposit
Saudi Arabia extended the period of a $3 billion investment earlier this month to increase foreign exchange reserves and aid Pakistan in recovering from the devastating floods’ economic effects.
The Saudi Fund for Development (SFD) extended the time for the deposit provided by the Kingdom of Saudi Arabia in the amount of $3 billion to the State Bank of Pakistan, according to the State Bank of Pakistan’s announcement.
The SBP added that the extension of the deposit term was a “continuation of the support provided” by Riyadh to Pakistan in order to maintain its foreign exchange reserves and aid it in “standing the economic consequences of the COVID-19 pandemic.”
The deposit has also helped Pakistan achieve its goal of overcoming “challenges in the external sector and attaining sustained economic growth.”
The Saudi Fund for Development (SFD) acknowledged the deposit’s rollover for a year in September of this year. On December 5, it was supposed to reach maturity.
Decline in Reserves
Pakistan’s central bank’s foreign exchange holdings decreased by $784 million to $6.7 billion as of December 2, indicating the country’s urgent financial need.
Even as it fights decades of high inflation and scrambles to acquire International Monetary Fund (IMF) financing, the drop implies that the reserves have fallen further from their November level of barely one month of import coverage.
For the first time since January 2019, the nation’s foreign exchange reserves have dropped below the $7 billion mark. The reserves are currently around $6.7 billion, which is almost the same as the reserves on January 18, 2019.
