Saudi Finance Minister Muhammad Al-Jadaan has told a foreign news agency on the sidelines of the Davos meeting that he country is finalizing the modalities for the continuance of the Saudi deposit of $3 billion with the State Bank of Pakistan. Tpnl witdrawal of psit, icwas , was expected to weigh heavily on the Pakistani foreign exchange reserves, which have been bleeding recently. This extension of tenor will provide Pakistan much relief, for when this deposit was combined with the $2 billion deposit by China, also due, it was expected to prove a heavy burden for Pakistan.
China had made the continuation of its deposit conditional upon IMF approval. Saudi Arabia did not make this an absolute condition, though a roll-over by the UAE is also linked to this approval. The Doha negotiations between the IMF and Pakistan will be affected by this Saudi decision, to the benefit of Pakistan, which will now be less under pressure to achieve a deal. It should be noted that this decision took place after concerted efforts by Pakistani high officials. Prime Minister Shehbaz Sharif and Finance Minister Miftah Ismail were both in Saudi Arabia to deal with this issue, while COAS Gen Qamar Javed Bajwa met Saudi Crown Prince Muhammad bin Salman, and while security issues constituted the main subject, the Saudi deposit could not have escaped discussion.
The Saudi decision, coming just as the PTI launched its Long March, at the time when Pakistan was negotiating with the IMF, showed that the Saudi government has confidence in the new government, and perhaps most importantly, its longevity. In that respect, it is not just a reflection of the close ties between the tqo states, but also between the two governments. While this rollover will not bring in any new money to Pakistan, it will prevent the need for the payment of a large amount. Since new money is needed precisely to service old debt, the relief is at much greater.
