Pakistan Receives $2 Billion from Saudi Arabia: Ishaq Dar

Finance Minister Ishaq Dar on Tuesday said the Kingdom of Saudi Arabia (KSA) has deposited $2 billion in the State Bank of Pakistan’s (SBP) account. Later he tweeted, “State Bank of Pakistan (SBP) has received deposit of $2 billion from the Kingdom of Saudi Arabia. This inflow has increased the forex reserves held by SBP and will accordingly be reflected in the forex reserves for the week ending 14 July 2023”. Dar also thanked all parties involved, with special mentions for KSA on the extension of the financing facility to Pakistan. This inflow offers a concrete possibility for the cash-strapped country to receive an important bailout from the International Monetary Fund (IMF) in the coming few days. Pertinently, the inflows also reflect Pakistan’s improved external liquidity and funding conditions following its Staff-Level Agreement (SLA) with the IMF on a nine-month Stand-by Arrangement (SBA) in June. However, program implementation and external funding risks remain due to the prevalent political climate and large external financing requirements. The lender’s Executive Board will meet on 12 July (Wednesday) to likely approve the disbursal of an initial tranche of $1.1 billion.