Pakistan has repaid $1 billion to the Kingdom of Saudi Arabia on Wednesday as the second installment of a $3 billion soft loan after Beijing agreed to provide a $1 billion financing line to Islamabad, sources confirmed to Geo News on Thursday.
This is the second time China has come to Pakistan’s rescue to repay the Saudi debt. Earlier this year, Islamabad repaid $1 billion to KSA in the first quarter of the current fiscal year. With the latest repayment, Pakistan has so far repaid $2 billion out of the total $3 billion debt. Islamabad had paid a mark up of over 3% on the SAFE deposit.
Saudi Arabia gave Pakistan a $3 billion loan and a $3.2 billion oil credit facility in late 2018.
The money had been deposited in State Bank of Pakistan on December 15 2018 with a three years maturity period. Islamabad is repaying the amount ahead of schedule.
The last tranche of $1 billion will be repaid next month.
With the new facility, Pakistan’s reliance on China increases. The country’s financial account has already turned negative to the tune of $1.33 billion because of an outflow of dollars.
So far, increased remittances helped Islamabad avoid an eruption of a full-fledged balance of payments crisis as remittances from abroad remained over $2 billion in the last five months.
