Saudi Arabia agreed to deposit $2 billion with State Bank?

Saudi Arabia deposit

Karachi: Brotherly nation Saudi Arabia has agreed to deposit $2 billion with the State Bank of Pakistan for a period of one year at a 4% annual profit rate. 

According to a report published in a business daily, Business Recorder, “Saudi Arabia had agreed to deposit $ 2 billion to meet one of the preconditions of International Monetary Fund (IMF) in which Pakistan had been asked to arrange external funding reportedly up to $ 6 billion”.

Following the commitment by the Kingdom, the United Arab Emirates (UAE) also “confirmed to the IMF” that it would deposit $ 1 billion with the SBP.

The report narrates an agenda that was on the list of the Federal Cabinet’s May 10 meeting. The report said that the Finance Division apprised the Federal Cabinet that the Kingdom of Saudi Arabia, through its Ministry of Finance, had agreed to deposit $2 billion with SBP for a period of 1 year at the “annual profit rate proposed was 4%”.

Is Pakistan receiving $2 billion from Saudi Arabia?

“Draft Deposit Agreement shared by the Saudi side was forwarded to Ministry of Law and Justice and Office of the Attorney General for Pakistan for vetting and clearance in light of the Cabinet decision of May 14, 2019,” the report added.

Upon approval by the Federal Cabinet, the SBP would be authorized by the government of Pakistan to enter into the Deposit Agreement. 

“The Ministry of Law and Justice had cleared the draft Agreement subject to fulfillment of all codal formalities whereas FBR had given concurrence for tax exemption.”

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