KARACHI: The State Bank of Pakistan (SBP) has signed an agreement for a deposit of $3 billion from Saudi Fund for Development (SFD).
The SBP in a statement on Monday said that a deposit agreement between the Kingdom of Saudi Arabia, represented by the Saudi Fund for Development (SFD), and the government of Pakistan, represented by the State Bank of Pakistan (SBP), was signed by the Chief Executive Officer of SFD Sultan Bin AbdulRahman Al-Marshad and the Governor SBP Dr Reza Baqir at the State Bank of Pakistan in Karachi, Pakistan.
Under this deposit agreement, SFD shall place a deposit of USD 3.0 billion with SBP.
“The deposit amount shall become part of the central bank’s foreign exchange reserves,” it said. “It will help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the Covid-19 pandemic.”
According to the SBP, the deposit agreement reflects the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and it is expected to further augment the economic ties between the two brotherly countries.
On October 27, Saudi Arabia agreed to provide $3 billion to Pakistan in the shape of cash assistance along with a $1.2 oil facility on deferred payment.
This is the second financial assistance package that the kingdom has extended to Pakistan in the past three years, aiming to help the country manage a brewing external sector crisis. The kingdom had extended a similar package valuing at $6 billion in October 2018 to provide breathing space to Pakistan before the country went to the International Monetary Fund for an extended loan facility.