Saudi Arabia will provide Pakistan USD 3 billion for a year to address the cash-strapped country's balance-of-payments crisis as Prime Minister Imran Khan Tuesday met Saudi King Salman in Riyadh.
The development came as Prime Minister Khan called on Saudi King Salman on the sidelines of the high-profile Future Investment Initiative forum in Riyadh. Both leaders expressed their desire to further strengthen the bilateral cooperation.
According to a statement from Prime Minister Khan's office in Islamabad, it was agreed that Saudi Arabia will place a deposit of USD 3 billion for a period of one year as balance of payment support.
"It was also agreed that a one year deferred payment facility for import of oil, up to USD 3 billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter," Geo News quoted the statement as saying.
Apart from attending the Future Investment Initiative conference, Khan also met Saudi Crown Prince Mohammad bin Salman to discuss matters of mutual interest.
Minister for Foreign Affairs Shah Mehmood Qureshi, Minister for Finance Asad Umar and other senior officials were also present during the meeting.
Khan has said that Pakistan would probably need loans from both friendly governments and the International Monetary Fund to meet its commitments.
Ahead of his visit to Riyadh, Prime Minister Khan said Pakistan must continue to prioritise good relations with Saudi Arabia despite the killing of dissident journalist Jamal Khashoggi because of the dire economic crisis facing the country.
Khan on Tuesday attended the investment summit that has been boycotted by many western officials and companies following the killing of Khashoggi inside the Saudi consulate in Istanbul on October 2.
Khan admitted that he could not afford not to attend the meeting.
Though shocked by Khashoggi's killing, Khan said his government needed urgent access to Saudi loans to avoid defaulting on record levels of debt within months.
"The reason I feel I have to avail myself of this opportunity [to speak to the Saudi leadership] is because in a country of 210 million people right now we have the worst debt crisis in our history, the cricketer-turned-politician was quoted as saying by the Middle East Eye, a London-based online news outlet.
"Unless we get loans from friendly countries or the IMF [the International Monetary Fund] we actually won't have in another two or three months enough foreign exchange to service our debts or to pay for our imports. So we're desperate at the moment," Khan said.
Khan is now scheduled to travel to Malaysia next week and to China on November 3 to seek financial assistance from the two friendly countries.
Pakistani media on Monday reported that the country immediately needed USD 12 billion to USD 13 billion to ease the financial crisis and retire foreign debt.
Pakistan formally approached the IMF on October 12 for a bailout to tide over the economic crisis.
But some tough talking by IMF Managing Director Christine Lagarde and the US on Pakistan's bailout plan, demanding absolute transparency on the country's debts, including those owned by China under the China-Pakistan Economic Corridor (CPEC) projects, has upset Islamabad.
Finance Minister Umar has said the government don't want to fully rely on the IMF. He said the loan programme with the IMF is almost final, but the government will have to see that the IMF does not place any "undoable conditions" for Pakistan in return.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)