The State Bank of Pakistan (SBP) on Sunday announced that the Saudi Fund for Development (SFD) confirmed the rollover of a $3 billion deposit for one more year.
The deposit was set to mature on December 5, the SBP tweeted, adding that the amount was placed with the central bank as part of its foreign exchange reserves. “This reflects continuing strong and special relationship between KSA (Kingdom of Saudi Arabia) and Pakistan,” the central bank said. The agreement for the deposit was originally signed in November 2021 with an aim to improve the State Bank’s foreign exchange reserves. The agreement was signed by SFD Chief Executive Officer Sultan Bin Abdul Rahman Al-Marshad and former SBP governor Dr Reza Baqir at the State Bank in Karachi.
In the last week of October 2021, Saudi Arabia had agreed to revive its financial support to Pakistan, including about $3 billion in safe deposits and $1.2 billion worth of oil supplies on deferred payments. The agreement was reached during the visit of former prime minister Imran Khan to the kingdom the same month. It should be noted that last week, the country’s foreign exchange reserves held by the SBP faced a decline of 1.9% on a weekly basis. As of September 9, SBP’s foreign currency reserves were recorded at $8,624.0 million, down by $176 million compared with $8,799.9 million on September 2. On Friday, the Pakistani rupee registered a decline for the 11th consecutive session, closing the week at 236.84 against the greenback after losing nearly Re1 or 0.41%. The dollar now stands only Rs3.1 short of the all-time high level of Rs239.94 on July 28, 2022.
The local currency has been under pressure for the last several months due to a host of reasons, including fast depleting foreign exchange reserves. With the rollover of the KSA deposit, the investors’ sentiment is expected to stabilise.
