Pakistan has suffered another economic reversal when Finance Minister Shaukat Tarin told the Senate that the Saudi Fund for Development (SFD) worth 3 billion dollars which was placed in the State bank of Pakistan in October 2021 will now have to be returned.
Saudi Arabia has now asked that the money that was borrowed in 2021 to improve Pakistan’s dwindling foreign exchange reserves has to be returned.
Saudi Arabia had given financial support to Pakistan that included $3 billion in deposits and $1.2 billion to $1.5 billion worth of oil supplies on deferred payments and one of the commitments asked by the Saudis was Pakistan will return the $3 billion within a year.
However, what is even more interesting is that the loan carried interest of four per cent which would have to be paid every three months.
Tarin said, “Interest rates are rising across the world. The interest rate for the Saudi loan being four per cent is not something bad.”The Saudi government has told us that they can ask for their money back if Pakistan defaults at any point,”.
The finance minister also added that there was no question of default and Pakistan would start getting crude oil from Saudi Arabia on deferred payments from March.
Click here to subscribe to The Commune on Telegram and get the best stories of the day delivered to you personally.