Pakistan Finance Minister discusses potential Saudi bailout of $3bln

By Al Mayadeen English
Source: Agencies
6 Jan 17:15
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Pakistan has requested Saudi Arabia to urgently provide $3 billion in cash after its foreign exchange reserves fell to a critically low level.

Dar Hopeful Of Second Bailout From Saudi Arabia

At his longest press conference ever delivered since October 2022, Pakistan's Finance Minister Ishaq Dar said on Friday that Pakistan is expected to receive a second $3 billion bailout from Saudi Arabi "within days".

He further pledged to increase Pakistan's foreign reserves by raising money through the "sale of assets."

Dar delivered this statement in response to the Pakistan Tehreek-e-Insaf’s (PTI) white paper, which severely criticized the government’s poor economic performance.

PTI issues white paper on economy backed by hard evidence. PDM's response is only mud-slinging. Incompetence galore in Islamabad! pic.twitter.com/rwm7hYLV9o
— Hasaan Khawar (@hasaankhawar) January 4, 2023

During his address, Dar reiterated his support for the IMF Programme while reassuring that the Ministry will not take further steps to burden the people.

He did not confirm clearly whether the National Security Committee (NSC) had also decided to back the IMF program.

Dar was in the company of the government's economic team, which included Planning Minister Ahsan Iqbal, Energy Minister Khurram Dastgir Khan, Economy Minister Ayaz Sadiq, Information Minister Marriyum Aurangzeb, and State Minister for Finance Aisha Ghaus Pasha.

"God willing, in matters of days, Saudi Arabia will beef up reserves," said Dar.

Over the past three months, the Finance Minister said Saudi Arabia would provide Pakistan with another $3 billion after it had already provided one in the past year.

Sources familiar with the matter say the decision is now pending before the Saudi King for a final decision.

The gravity of the economic situation has prompted Pakistan's civil-military leadership to discuss the matter seriously in the past week.

Pakistan's foreign exchange reserves are quickly running out because US dollars are being smuggled into Afghanistan without any restrictions, as per Pakistani media. This has forced Islamabad to put strict rules on imports and foreign currency transactions.

The fast-depleting reserves turned worse last month when the State Bank of Pakistan's (SBP) reserves dropped to an alarming level of $6 billion, the lowest since April 2014. The liquid foreign reserves held by the country stood at $12 billion as of December 16, including $5.88 billion held by commercial banks operating in the country.

To stop the alleged flow of money to Afghanistan, the authorities quickly began a full-fledged operation in the nation's largest cities. The Federal Investigation Agency (FIA) was dispatched to raid major cities, particularly Peshawar, which is close to the Afghan border, in a major effort to prevent people from smuggling money, especially dollars.