Pakistan has returned second instalment of $1 billion of the $3 billion loan given by the Kingdom of Saudi Arabia much ahead of schedule, mainly due to pressure from Riyadh, albeit no side officially confirms it.
This came possible after China agreed to provide another $1 billion financing line to Pakistan for the second time in this year. Earlier this year, Pakistan repaid $1 billion to KSA in the first quarter of the current fiscal year with China’s help.
With the latest repayment, Pakistan has so far repaid $2 billion out of the total $3 billion debt. The last tranche of $1 billion will be repaid next month.
In late 2018, Saudi Arabia had given Pakistan a $3 billion loan and a $3.2 billion oil credit facility. The money had been deposited in State Bank of Pakistan on December 15, 2018 with a three years maturity period.
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.
Pakistan returned the instalment of the Saudi loan after getting a commercial loan from China. After repayment of the second instalment, the country’s foreign exchange reserves stand at $13.3 billion.
