Saudi fund has decreased pressure on foreign exchange reserves: Imran Khan

Islamabad, Oct 25: Prime Minister Imran Khan said Wednesday that Saudi Arabia's USD 6 billion assistance package has eased pressure on Pakistan's foreign exchange reserves and exuded confidence that the country will emerge stronger and more prosperous in the coming years.

In the deal announced Tuesday after Prime Minister Khan called on Saudi King Salman bin Abdul aziz, Riyadh said it will give Pakistan USD 3 billion in foreign currency support for a year and a further loan worth up to USD 3 billion in deferred payments for oil imports.

Khan addressed the nation to share the details of his efforts to bring cash-strapped Pakistan out of financial difficulties. "My Pakistanis, today I am here with good news for all of you. We were facing really hard times. We were under high pressure to pay heavy debts. But thanks to Saudi Arab's extension of assistance, we are out of the pressure," he said.

The Prime Minister also said that the government was in contact with two other friendly countries for more financial assistance. He said people should not worry as the difficult time would pass and Pakistan will emerge as a much stronger and prosperous country in the coming years.

He did not name the countries but official sources said that the two countries were the UAE and China. They said that a high-level UAE delegation will arrive in Pakistan on October 26 to discuss investment opportunities, while Khan will visit China in the first week of November to seek business and investment as well as explore financial assistance.

Khan said the Saudi financial package will strengthen Pakistan's bargaining position in case the government approached the International Monetary Fund (IMF) for a bailout.

He said even if the government was forced to seek IMF assistance, it would not need as much money as it would have needed in absence of the Saudi assistance. Pakistan's Finance Minister Asad Umar recently said the country may need more than USD 12 billion to plug its finances as the current-account deficit widens and foreign-currency reserves plummet.

Khan also said Pakistan would try to play the role of a mediator in the Yemen war. "I also want to share with you... we were trying to play a role in ending the Yemen war," he said.

The Prime Minister criticised the previous governments and held them responsible for the current economic crisis. He said the country's debt was Rs 6,000 billion in 2008 which ballooned to Rs 30,000 billion in 2018. Khan said the government was doing audit of the massive debt and threatened that the corrupt element would face merciless accountability.

He also said that his mega project of constructing 5 million houses in five years would revive 40 industries and create job opportunities for the youth. Pakistan is in search of USD 12 billion foreign loans and aid to avoid default on international debt obligations, as the country is required to return USD 11.7 billion loans to foreign countries.

PTI