Saudi Arabia and the United Arab Emirates (UAE) have not withdrawn loans worth $2 billion that matured last month, signalling that relations between Pakistan and the two key Gulf nations are getting better.
According to a report by the Express Tribune that quoted a senior government official, Saudi Arabia has retained the remaining $1 billion cash deposit.
The kingdom had earlier withdrawn $2 billion out of $3 billion loans that it had extended in late 2018 to help Islamabad avoid default on international debt repayments. Pakistan’s foreign minister had said in December that the loans were withdrawn due to a slump in crude oil prices.
The local media outlet also stated that the UAE has rolled over $1 billion deposit for another year.
Both the loans matured in the fourth week of January.
Prime Minister (PM) Imran Khan had obtained $6.2 billion financial support package from Riyadh in October 2018 and another $6.2 billion had been agreed by the UAE. However, the UAE subsequently disbursed only $2 billion.
The club of the world’s richest economies, G-20, had asked the applicant countries to conclude debt suspension agreements by December 31, 2020, for phase-1 (May to Dec 2020).
Pakistan has not been making regular debt repayments to Saudi Arabia after the kingdom confirmed in July last year to suspend the bilateral official credit under the G-20 initiative.
It is not clear whether Saudi Arabia would also revive the $3.2 billion deferred oil financing facility. The kingdom had withdrawn the $3.2 billion deferred oil financing facility in May last year.