ISLAMABAD: During Prime Minister Shehbaz Sharif’s current visit to Saudi Arabia, Pakistan has decided to seek an additional $3.2 billion package from the Saudis to increase the total facility to $7.4 billion from the current $4.2 billion, to avoid further depletion of foreign currency reserves.
During the visit of Prime Minister Shehbaz Sharif, we will recommend that the Kingdom of Saudi Arabia boost the deposit from $3 billion to $5 billion and double the Saudi Oil Facility (SOF) from $1.2 billion to $2.4 billion, bringing the whole package to $7.4 billion.
Pakistan will also ask the Kingdom of Saudi Arabia to extend the existing $4.2 billion package for another year, until June 2023, to align it with the IMF program, as Islamabad has already asked the Fund to extend the existing Extended Fund Facility (EFF) for nine months, until June 2023, while also increasing the program’s size from $6 billion to $8 billion.
During the previous PTI-led regime, Saudi Arabia had previously handed the State Bank of Pakistan $3 billion in deposits and a $1.2 billion oil facility on delayed payment. The deposits were made in December 2021, and the Saudi Oil Facility (SOF) began in March 2022, with a total of $100 million released thus far.
Saudi Arabia has attached stringent conditions to the last $4.2 billion contributions, which were related to the IMF program.
Pakistan and the IMF had already started crunching numbers by sharing data, and the IMF review mission was slated to begin discussions in mid-May 2022 to complete the pending Seventh Review and disburse the next tranche of $960 million.