Pakistan returns $1 billion of Saudi Arabia\`s loan
Pakistan has returned $1 billion to Saudi Arabia as the second instalment of a $3 billion soft loan_ as Islamabad reaches out to Beijing for a commercial loan to help it offset pressure to repay another $1 billion to Riyadh next month_ officials said on Wednesday.
Analysts say it is unusual for Riyadh to press for the return of money. Relations between historically close friends Pakistan and Saudi Arabia suffered a strain earlier this year when Foreign Minister Shah Mehmood Qureshi_ in an unusually sharp warning_ asked Saudi Arabia-led Organisation of Islamic Cooperation (OIC) to stop dilly-dallying on the convening of a meeting of its Council of Foreign Ministers (CFM) on Kashmir.
Army Chief Gen Qamar Javed Bajwa subsequently visited Riyadh in August to ease the tensions. Gen Bajwa also met the Saudi ambassador in Islamabad on Tuesday.
With the $1 billion flowing out_ Pakistan which has $13.3 billion in State Bank foreign reserves could face a balance of payments issue after clearing the next Saudi instalment.
China has come to our rescue_ a foreign ministry official told Reuters.
A finance ministry official said the SBP was already in talks with Chinese commercial banks. We've sent $1 billion to Saudi Arabia_ he said. Another $1 billion will be repaid to Riyadh next month_ he said. Before that Islamabad had returned $1 billion in July.
Although a $1.2 billion surplus in the current account balance and a record $11.77 billion in remittances in the past five months have helped support the economy_ having to return the Saudi money is still a setback.
Saudi Arabia gave Pakistan a $3 billion loan and a $3.2 billion oil credit facility in late 2018. After Islamabad sought Riyadh's support over human rights violations by India in occupied Kashmir_ Saudi Arabia has pushed Pakistan to repay the loan. -The Dawn
.png "Advertisement")
