Islamabad: The federal cabinet has approved an agreement to keep $3 billion aid from Saudi Arabia in the State Bank of Pakistan.
The Cabinet endorsed the deal via a circulation summary Saturday.
The Saudi government had promised to maintain a reserve of $3bn at the State Bank. According to the agreement, the aid will remain in the State Bank’s deposit account for a year.
Pakistan would, however, pay the Saudi government a 4% yearly profit on this sum, sources confirmed.
The proposed agreement with the Saudi government was forwarded to the Ministry of Law and the Office of the Attorney General.
The Attorney General’s Office and the Ministry of Law reached an agreement on a draft.
The cabinet approved the State Bank’s retention of $3 billion from the Saudi Development Fund.
According to official sources, Saudi Arabia has agreed to provide $1.2 billion for the supply of refined POL products, with the Economic Affairs Division (EAD) negotiating on behalf of the Pakistani government.
In response to questions, Muzammil Aslam, Spokesperson for Adviser to the Prime Minister on Finance, said Pakistan was expecting to get $7 billion from just three sources over the next 60 days.
These include $3 billion in deposits from Saudi Arabia, a $1.2 billion Saudi Oil Facility with deferred payments, an $800 million Islamic Development Bank oil facility, $1 billion raised through the issuance of Sukuk bonds, and $1 billion from the IMF.
All of these dollar inflows, he argued, would be sufficient to alleviate pressure on existing import bills.
