KARACHI: The State Bank of Pakistan on Monday inked an agreement with the Saudi Fund for Development (SFD) to admit$ 3 billion, which will be placed in the SBP’s account with an end to ameliorate its foreign exchange reserves.
The agreement was inked by SFD Chief Executive Officer Sultan Bin Abdul Rahman Al-Marshad and SBP Governor Dr. Reza Baqir at the State Bank in Karachi, according to a statement issued by the SBP.
In the last week of October, Saudi Arabia had agreed to revive its fiscal support to Pakistan, including about$ 3 billion in safe deposits and$1.2 bn worth of canvas inventories on remitted payments.
An agreement was reached during the visit of Prime Minister Imran Khan to the area last month.
Information Minister Fawad Chaudhry latterly blazoned that Saudi Arabia had blazoned the support for Pakistan with$ 3bn as deposit in the SBP and also financing meliorated petroleum product with$1.2 bn during the time.
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“ Under this deposit agreement, SFD shall place a deposit of USD 3 billion with SBP. The deposit quantum under the agreement shall come part of SBP’s Foreign Exchange Reserves,” said the press release issued on Monday.
Still, it didn’t speak about the interest on$ 3bn while the banking sources believe the interest rate is advanced than the global request.
When the SBP was officially communicated to know the agreed rate of return on Saudi funds as there were massive enterprises in fiscal request about the rates being given on$ 3bn, it stated “ As per agreement all terms are nonpublic and can not be revealed without the concurrence of both the parties.”
The press release further stated it would help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse goods of the Covid-19 epidemic.
The SBP said the deposit agreement reflected the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and will further compound the profitable ties between the two fraternal countries.
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Still, the agreement for$ 3bn didn’t impact the exchange rate, and the original currency further lost against the US bone to reach an each-time low.
The US bone kept its demand advanced during the entire session on Monday and closed at Rs176.20 as it gained 74 paise.
Experts in the fiscal request said the significance would not fall in coming months indicating that importers would keep buying bones for guarding unborn trading with possible advanced bone rates.
The flux of remittances and foreign direct investment declined in FY22; remittance fell by$ 152m in October compared to inrushes in September FY22 and the FDI fell by 12 percent during the July-October period of the current fiscal time.
Meanwhile, Adviser to the Prime Minister on Finance Shaukat Tarin briefed Prime Minister Imran Khan on the progress on profit bills, fiscal backing from Saudi Arabia as well as the canvas installation on remitted payments, adds APP.
During the meeting, matters relating to the tips paid by the public sector enterprises also came under discussion.
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