Islamabad:
Saudi Arabia remains the main source of cheap foreign loans for Pakistan, rolling more than $ 5 billion in loans at an annual interest rate of 4%, approximately one third cheaper than Chinese cash deposits and less than half of the cost of foreign commercial loans.
The official records show that Riyader loaded an interest rate of 4% in two separate cash deposit facilities obtained by Islamabad in recent years. The loan, originally hired for one year, has not yet been paid. Government officials said the kingdom has been circling annually without imposing additional costs.
An installation of Saudi cash deposit of $ 2 billion will mature in December, that the Ministry of Finance plans to have turned back again, the sources said. They added that another Saudi loan of $ 3 billion, obtained to connect the external financing gap under the IMF program, will mature in June next year.
The IMF has stipulated that the three bilateral creditors of Pakistan, Saudi Arabia, China and the United Arab Emirates must keep their cash deposits until the end of the three -year program. Together, these countries have provided $ 12 billion in deposits, forming most of the gross currency reserves of $ 14.3 billion of the Central Bank.
Unlike the past, IMF programs are no longer helping Pakistan big. Despite the package, the Central Bank had to buy more than $ 8 billion in the local market to meet mature debt obligations. At the same time, the Ministry of Finance depends more and more on the credit guarantees of multilateral banks to access international markets, since the “clean health invoice” of the global lender is no longer enough for itself.
Pakistan and Saudi Arabia signed this week a historical agreement of strategic mutual defense that, according to the Ministry of Foreign Affairs, reflects the shared commitment of both nations to strengthen security, promote regional peace and jointly disappoint any aggression.
To a question of an express news correspondent on the economic aspect of the defense agreement, the spokesman of the Ministry of Foreign Affairs said that the Pakistan-Saudi relationship is multifaceted. The defense has been a very critical and important component of it. Just as defense is important, economic cooperation is also an important component. But at the same time within the general field, these are different clues, said the spokesman.
He added that the Pakistan-Saudi relationship is supervised by the Pakistan-Saudi Supreme Coordination Council, a general framework based on three pillars, one of which is economical. While these pillars are interconnected, each one is designed to strengthen cooperation regardless of others. Therefore, economic cooperation remains solid, and we hope to deepen economic cooperation between the two countries, according to the spokesman.
The sources said that, although Saudi loans have an interest rate of 4%, Pakistan is paying around 6.1% in four cash deposit facilities for a value of $ 4 billion. These facilities have a price of the six -month night financing rate, plus 1.72%, which makes them significantly more expensive than Saudi deposits. However, the installation of Saudi oil of $ 1.2 billion is obtained at a fixed interest rate of 6%, the sources added.
Chinese facilities are also expected to mature between March and July next year, transfer to the light of the IMF conditions and the low currency reserves of Pakistan.
Among the most expensive foreign commercial loans was one of Standard Chartered Bank, which extended $ 400 million for six months at an interest rate of 8.2% in the last fiscal year. The loan was hired in the SFF more than six months plus a margin of 3.9%, the sources said.
Similarly, the United Bank Limited organized a loan of $ 300 million for only 10 months at an interest rate of 12 months plus 3.5%, which was also equal to the interest rate of 7.2%, the sources added. The EAU had initially awarded a loan of $ 2 billion to Pakistan at an interest rate of 3%, but their last installation of $ 1 billion was obtained at 6.5% in 2024 before the IMF agreement.
Pakistan also obtained a loan of $ 1 billion of commercial banks for a period of five years at an estimated rate of 7.22%. More than 7.2% of the rate is paid despite the fact that the Asian Development Bank has provided partial guarantees to foreign lenders, sources said.
Pakistan is also taking advantage of Chinese commercial loans, which now becomes Chinese currency from USD. Rates in these Chinese facilities vary. The Chinese commercial installation equal to $ 2.1 billion is refinanced for a period of three years to approximately 4.5% of the interest rate, the sources said.
Similarly, the Bank of China’s loan of $ 300 million is taken for two years with an interest rate of 6.5% and another $ 200 million are obtained at an interest rate of 7.3%, the sources added. A loan of $ 1.3 billion from China’s industrial and commercial bank at a fixed interest rate of 4.5%was taken.
