Pakistan’s government says Saudi Arabia has agreed to give Islamabad $3 billion in foreign currency support for a year, as well as a $3 billion loan in deferred oil import payments, to help ease Pakistan’s economic crisis.
The $6 billion rescue package exceeds forecasts by analysts and is expected to reduce the size of any bailout from the International Monetary Fund (IMF) that Pakistan is currently negotiating.
The Saudi offer came as Pakistani Prime Minister Imran Khan attended an investment conference in Saudi Arabia that has been boycotted by other leaders over the killing of a dissident Saudi journalist at the country's consulate in Istanbul.
Among those boycotting the Saudi investment conference are U.S. Treasury Secretary Steven Mnuchin and IMF Director-General Christine Lagarde.
Pakistan’s prime minister said before departing for the conference that his country is "desperate" to bolster its foreign currency reserves, which are at a four-year low – equal to less than two months of imports and barely enough to make its debt repayments through the rest of 2018.
Pakistani Finance Minister Asad Umar earlier in October requested talks with the IMF on what would be the country's second IMF bailout in five years.
An IMF team is due to visit Pakistan to open negotiations on November 7.
Khan’s first foreign trip since taking office in August was a visit to Saudi Arabia in September. But that trip failed to produce any significant assistance, despite Pakistani media reports of agreements on deferred oil payments.
Pakistan's Foreign Ministry on October 23 said Khan’s current visit was successful.
"It was agreed Saudi Arabia will place a deposit of $3 billion for a period of one year as balance of payment support," the ministry said in a statement.
"It was also agreed that a one-year deferred payment facility for import of oil, up to $3 billion, will be provided by Saudi Arabia,” the ministry said. “This arrangement will be in place for three years, which will be reviewed thereafter."
