Pakistan and Saudi Arabia will discuss the possibility of augmenting the $3 billion deposit with the Asian country’s central bank through “term extension or otherwise”, according to a joint statement, following Prime Minister Shehbaz Sharif’s visit to Saudi Arabia.
Last year, Saudi Arabia deposited $3 billion in the State Bank of Pakistan to help support its foreign reserves. In addition, Pakistan had also signed an agreement worth $1.2 billion for the import of petroleum products on deferred payments.
The joint statement said that the two countries will also explore options to further enhance the financing of petroleum products and support the economic stromal reforms for the benefit of Pakistan.
The country’s yawning current account deficit and fall in foreign reserves have forced it to look for external finances. According to the State Bank of Pakistan’s (SBP) weekly report released on Thursday, the country’s total liquid foreign exchange reserves went down by $376.7 million on April 23, 2022, to $16.668 billion. The SBP reserves decreased by $328 million to $10.55 billion.
Pakistan’s foreign exchange reserves have fallen to a 28-month low of less than $11 billion, hardly enough to provide import cover for the next two months. The last time foreign reserves fell below this level was in December 2019.
The joint statement further said that Pakistan welcome the decision of Saudi Arabia to extend the agreement to finance exports of crude oil products and oil derivatives.
The two countries agreed to explore ways of joint cooperation in several fields, including innovative use of hydrocarbons, elect city, clean technology for hydrocarbon resources, energy efficiency, and localization of the energy sector products and supplying the chains associated with it.
The two sides also agreed to explore cooperation in renewable energy projects and developing such projects through various sources such as solar and wind energy, in addition to considering partnership opportunities in these sectors.
The statement said that the two sides expressed their intention to hold investment forums in order to introduce the available opportunities to the business sectors of both sides, urge them to establish partnerships in various investment fields, and work jointing to solve the challenges faced by the investors through holding meetings of the Saudi-Pakistani Business Council.
Both sides also stressed the importance of cooperation between the two countries in respect of the opportunities available through the economic transformation programs under the Kingdom’s Vision 2030 and benefitting from the Pakistani expertise and capabilities in a number of sectors.
