Saudi succour for Pak crash crunch

ISLAMABAD: Saudi Arabia’s Crown Prince Mohammed bin Salman directed authorities Tuesday to consider increasing deposits in Pakistan’s central bank to $5 billion (Pak Rs 1,14,000 crore) to help the cash-starved country left with forex reserves that can barely cover a month’s imports.
Riyadh’s announcement -- which also contained a nudge to jack up investments in Pakistan to $10 billion (Pak Rs 2,28,000 crore) -- came a day after army chief General Asim Munir met Prince Salman in Madina during a week-long visit to Saudi and UAE.
“His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, has directed to study augmenting the Kingdom of Saudi Arabia’s investments in the sisterly Islamic Republic of Pakistan, which have previously been announced on August 25, 2022, to reach $10 billion,” an official Saudi Press Agency report said, referring to the investment push. The report mentioned a similar directive to increase deposits to $5 billion.
Although Riyadh and the Pakistani army have said in official releases that Munir and the Saudi prince reviewed military and defence relations, the visit was largely viewed from the lens of Pakistan’s parlous economy.
Islamabad needs Saudi money to shore up forex reserves and avert payment defaults. Riyadh had deposited $3bn in November 2021 under the tenure of former PM Imran Khan. Last month, the kingdom extended the terms of the funding.
Simultaneously, Islamabad has been making efforts to revive an IMF credit line stalled for months. The global lender has not yet approved the release of $1.18bn due to be disbursed in November last year. The delay was caused by Pakistan’s unwillingness to implement conditions already agreed with the IMF.
A Pakistani delegation led by finance minister Ishaq Dar met IMF officials in Geneva Monday on the sidelines of a donors’ conference called to deal with the aftermath of last year’s devastating floods.
Dar reiterated Pakistan’s commitment to meet the IMF terms. The donors at Geneva pledged over $9bn in flood-recovery funds.