Search form

You are here

  • Home
  • Saudi Arabia to deposit $2 billion in Pakistani central bank before IMF bailout — defense minister 


Saudi Arabia to deposit $2 billion in Pakistani central bank before IMF bailout — defense minister 

Short Url

https://arab.news/64vxd

Updated 27 May 2023
Follow

Saudi Arabia to deposit $2 billion in Pakistani central bank before IMF bailout — defense minister 

  • Khawaja Asif promises to place all resources of Pakistan at the Kingdom’s disposal for its safety and security 
  • Says his party is seeking ‘judicial remedy’ to get ex-PM Nawaz Sharif’s conviction overturned before his return 
Updated 27 May 2023
AAMIR SAEED 

ISLAMABAD: Pakistan’s Defense Minister Khawaja Asif said on Thursday that Saudi Arabia would be depositing funds worth $2 billion in the Pakistani central bank before the revival of a stalled $6.5 billion International Monetary Fund (IMF) bailout program, amid desperate attempts by the South Asian country to secure external financing to avoid a default. 

Pakistan, a nation of over 220 million, has been facing an economic crisis for the last several months, with soaring inflation, a depreciating currency and critically low foreign exchange reserves. To avert the possibility of a default on its international obligations, the government has been striving for the resumption of the IMF loan program, stalled since November last year. 

In March, the IMF asked Pakistan to secure financing assurances from friendly states and multilateral donors before it could release $1.1 billion tranche, after which China rolled over its $2 billion loan to the cash-strapped South Asian nation. This was followed by a $2 billion pledge by Saudi Arabia and the UAE promising $1 billion support to Islamabad. 

However, the global lender has yet to sanction the release of funds. To keep the frail economy afloat, the South Asian country is facing the daunting task of securing the crucial IMF funds ahead of its budget for the next fiscal year on June 9. 

“The IMF asked them (Saudi Arabia) to give that commitment to them. They (Saudi Arabia) have already given that, that means that they will pay [the funds to Pakistan],” Asif told Arab News in an exclusive interview on Thursday. 

“I think, if I am not wrong, they will be depositing that money ($2 billion) before the IMF program. The IMF is not giving us something, not a big amount. It is just a program which we have to complete till 30th of June.” 

Pakistan’s IMF bailout program is set to expire on June 30, which has prompted the government to look for other options to avert a sovereign default. 

“We are receiving help from UAE, Saudi Arabia, China and some other sources also,” Asif said. “We hope to, God willing, come out of this economic wilderness very soon.” 

Earlier this year, the defense minister said in one of his statements that Pakistan had already defaulted, stirring a debate and fueling commotion within the country’s business community. 

“My use of the word default perhaps was not very accurate or very appropriate, but the fact remains that we are in a dire financial situation, we were in dire financial situation and we are still not out of the woods,” he replied, when asked about his statement. 

Asif said he was “just trying to explain” by using the word default that Pakistan was borrowing money to service its loans. 

During the interview, the minister lauded Saudi Arabia for its assistance to Pakistan on several occasions and expressed profound regard for the Saudi royal family. 

“Saudi Arabia, the land obviously, is the ultimate sacredness for us, the two holy cities. And our relationship with Saudi Arabia has a long history of brotherhood and respect and love for each other,” he said. 

“I have no words to explain that the feelings we have for Saudi Arabia and the ruling family of Saudi Arabia. They have helped us at very crucial junctures of our history in last 75 years and we are indebted to them.” 

He vowed to place all resources of Pakistan at the Kingdom’s disposal for its protection and safety. 

“And our forces or our resources, whatever resources we have mostly defense related, they will always be at the disposal of the Kingdom of Saudi Arabia for their defense, their protection,” Asif said. 

“Whatever worth we are, we will always stand by the Kingdom of Saudi Arabia.” 

Arab News also questioned Asif about the return of his Pakistan Muslim League-Nawaz (PML-N) party’s supremo and three-time former prime minister, Nawaz Sharif, to Pakistan. To which, Asif said said they were following a legal way to get his conviction in corruption cases overturned before his return to the country from London. 

Sharif, who is the elder brother of sitting Pakistan PM Shehbaz Sharif, was restricted for life from holding any political office by Pakistan’s top court in April 2018, followed by his conviction in a corruption case the same year. The ex-premier, who left for London in 2019 after securing bail on medical grounds and has since not returned, says the cases against him were politically motivated. 

“He will be returning soon. There are some legal hurdles, the sentence he received during 2017-18 when engineering to bring Imran Khan to power was taking place,” Asif said. “He [Sharif] had to be replaced and sentenced, that was a plan.” 

The defense minister said the “circumstances” forced Sharif to stay in exile in London. 

“He is still suffering, and he is in exile not because of his own choice,” he said, adding that Sharif was dismissed on the “most frivolous” charge of not receiving money from his son’s company. 

“We have to secure his position legally before he returns. I think that will happen soon. We are following the legal path to secure that, nothing, something which is beyond legal realm.” 

The minister said they were working on a legal strategy to get Sharif’s conviction overturned from the Supreme Court. 

“We are seeking a judicial remedy to that,” he said, adding that they would be filing a petition for it in the Supreme Court. “It’ll happen. You’ll come to know about it.” 

Topics: Pakistan’s defense minister Khawaja Asif Pakistan Saudi Ties International Monetary Fund (IMF)

‘My son keeps crying’: Pakistani families left in medical crisis as India cancels visas amid conflict

Updated 57 min 1 sec ago
Reuters
Follow

‘My son keeps crying’: Pakistani families left in medical crisis as India cancels visas amid conflict

  • India, Pakistan hold a fragile, US-brokered truce after nearly three weeks of tensions that took South Asia to the brink of war
  • Despite the ceasefire, punitive measures announced by India, such as trade suspension and visa cancelations, remain in place
Updated 57 min 1 sec ago
Reuters

LAHORE/KARACHI/ISLAMABAD: As Musfira, a seemingly healthy one-and-a-half-year-old girl, plays with the toys on the floor, her mother Salsabeel Safi, 22, tries to catch her attention with a wooden toy car that has watermelon wheels.

It’s a typical picture of a mother playing with her daughter, except they are facing a medical crisis after India canceled most valid visas, including medical visas, issued to Pakistani nationals amid rising tensions between the two nuclear rivals.

“We had applied for an Indian visa in December. It has been four months now, but we didn’t get a visa. Because of the Pakistan-Indian situation our visa has been stopped,” said Safi.

Musfira has no veins between her heart and lungs and her arteries are so severely constricted that she has very poor blood circulation, said Safi. Her heart also has a hole in it. As a result, Musfira’s mother says she frequently turns blue and has to be hospitalized due to insufficient oxygen in her body.

The family has sought help at several hospitals in Pakistan, but was told that the little girl’s condition could not be treated in the country. At the suggestion of doctors they consulted in Pakistan, the family decided to seek surgical intervention in India.

While treatment options for Musfira’s condition are available in other countries, the family felt India was the best choice due to its proximity and affordable health care. They could even travel there by car.

Once she learnt that treatment would cost an estimated $10,000, Safi, who’s a content creator on social media, started raising funds online.

Last December, Musfira’s family applied for their visas after an Indian hospital invited them to seek treatment there, but they were soundly rejected.

“Her condition is deteriorating,” said Safi.

Many Pakistani families have found themselves in the same predicament as India and Pakistan continue to hold a fragile US-brokered ceasefire after nearly three weeks of escalating tensions that took South Asia to the brink of war.

Mohammad Imran and his wife, Nabeela Raaz, an Indian national, traveled from Karachi to India with their 17-year-old son, Mohammad Ayan, who suffers from a spine injury on March 27. When India revoked most visas for Pakistani nationals in late April, they returned to Pakistan on April 27 before Ayan could receive any treatment. Ayan’s mother was not allowed to accompany them back to Pakistan.

“My son keeps crying,” said Imran. “Even I cry at times when my son says, ‘Please call mama here’. I can’t see her coming here anytime soon.”

In Islamabad, Shahid Ali said his two children who suffer from heart disease were forced to return to Pakistan without getting the surgery they desperately needed.

“The Pahalgam incident took place and the Indian government ordered the cancelation of visas in 24 hours,” said Ali.

On April 22, 26 men were killed in an attack targeting Hindus in Pahalgam in Indian-administered Kashmir. It was the worst attack on civilians in India since the 2008 Mumbai shootings.

The next day, India pulled out of the 1960 Indus Water Treaty regulating the sharing of water from the river and its tributaries with Pakistan.

India also identified two of the three suspected militants in the Pahalgam attack as Pakistanis, although Islamabad denied any role.

On May 7, India launched attacks on what it said were “terrorist camps” in Pakistan, including Azad Kashmir.

Strikes and counter-strikes and a slew of tit-for-tat reprisals followed before US diplomacy and pressure helped the two nations agree to a “full and immediate ceasefire” on May 10.

Despite the truce, punitive measures announced by India, such as trade suspension and visa cancelations, remain in place, according to Indian government sources who spoke to Reuters.

For the families of these Pakistani children, some of whom are hanging on by the thinnest thread, a solution to the latest chaos cannot come sooner.

“We want India and Pakistan to resolve issues between them so that Musfira and several other children like her, whose treatment is due in India, can get visas and get treatment there,” said Musfira’s uncle, Zulkifl Haroon. “So that their lives can be saved.”

Topics: Pakistan India Ties Ceasefire

Pakistan cuts diesel rate, maintains petrol price for next fortnight

Updated 16 May 2025
Follow

Pakistan cuts diesel rate, maintains petrol price for next fortnight

  • Diesel powers heavy vehicles used to transport goods, while petrol is used for private transportation
  • Islamabad regulates petroleum prices on a fortnightly basis to reflect import costs in consumer prices
Updated 16 May 2025
Ismail Dilawar

KARACHI: The Pakistani government has maintained the price of petrol and slashed the rate of high-speed diesel by Rs2 per liter, the Finance Division said on Friday.

Petrol is primarily used in Pakistan for private transportation, including small vehicles, rickshaws and two-wheelers. Diesel, on the other hand, powers heavy vehicles used for transporting goods across the country.

After the latest revision, a liter of diesel will cost Rs254.64, while that of petrol will continue to sell for Rs252.63, according to a notification issued by the Finance Division.

“The government has decided the following prices of petroleum products for the fortnight starting today, based on the recommendations of OGRA (Oil and Gas Regulatory Authority) and the relevant ministries,” it read.

Fuel prices in Pakistan are reviewed and adjusted on a fortnightly basis. This mechanism ensures that changes in import costs are reflected in consumer prices, helping to sustain the country’s fuel supply chain.

The new price of diesel has already taken effect.

Topics: petrol diesel Pakistan petrol prices

Pakistan observes ‘Day of Gratitude’ to honor nation’s response to Indian strikes

Updated 22 min 17 sec ago
Follow

Pakistan observes ‘Day of Gratitude’ to honor nation’s response to Indian strikes

  • India struck several Pakistani cities with missiles on May 7 amid heightened tensions over an attack in Indian-administered Kashmir last month
  • Pakistan said it downed six Indian fighter jets, including three French-made Rafales, in response, a claim India has not yet officially confirmed
Updated 22 min 17 sec ago
KASHIF IMRAN

ISLAMABAD: Pakistanis are observing a ‘Day of Gratitude’ today, Friday, to honor a response by armed forces and the public to this month’s Indian strikes against Pakistan, with President Asif Ali Zardari describing it as “great moment.”

India struck several Pakistani cities with missiles on May 7 amid heightened tensions over an attack last month in Indian-administered Kashmir. Pakistan said it immediately responded to Indian strikes and downed six Indian fighter jets, including three French-made Rafales.

India has not officially confirmed the downing of jets, but its air force chief this week told a news conference in New Delhi that “losses are a part of combat.” Both neighbors traded air, missile, drone and artillery fire for four days before the United States brokered a ceasefire on May 10.

In his message on the Day of Gratitude, President Zardari said the success of ‘Operation Bunyan-um-Marsoos’ against India belongs to both the armed forces and the entire Pakistani nation, who stood like an iron wall against “enemy aggression.”

“I am proud of our Armed forces who responded to Indian provocation with precision, professionalism, and strength. I am glad that the world witnessed and acknowledged Pakistan’s patience and restraint as well as the operational effectiveness that compelled the enemy to cease its aggression. We stood firm. We stood united. And we emerged victorious with dignity,” he said in a statement.

“Pakistan is a peace-loving country and does not harbor aggressive design against any country. However, let there be no doubt: Pakistan will never compromise on its sovereignty, territorial integrity, or its core national interests. Any aggression against our homeland will be met with full force.”

On Friday morning, a 31-gun salute was held in the federal capital of Islamabad and 21-gun salutes in provincial capitals. Several rallies, gatherings, events and visits to national memorials are expected to held, mainly after Friday prayers, across the South Asian country. Public and private institutions will hold commemorative programs as well.

Prime Minister Shehbaz Sharif said Pakistani armed forces, with their response to Indian strikes, wrote a "golden chapter in the military history," the Radio Pakistan broadcaster reported.
"Our Shaheens (PAF pilots) hammered the enemy and gave it a befitting reply," he said in his message. "This is not only victory of our Armed Forces but also success of our principles as honorable and dignified nation."

India and Pakistan, both bitter rivals who possess nuclear weapons, have fought three wars since 1947 after gaining independence from British colonial India. The root cause of their conflict is the disputed Himalayan region of Kashmir, which they both claim in full but rule only in part.

This month’s military conflict between the rivals was also triggered by an attack by gunmen on tourists in Indian-administered Kashmir’s Pahalgam town, which killed 26 people on April 22. India blamed the attack on Pakistan. Islamabad denies the charge and has called for a credible, international probe into it.

On Thursday, Pakistan PM Sharif, accompanied by Army Chief General Asim Munir and senior members of the cabinet, visited Pakistan Air Force (PAF) base Kamra to laud Pakistani pilots for successfully defending the country, hours after Deputy Prime Minister Ishaq Dar informed lawmakers in parliament that the ceasefire agreement between Islamabad and Delhi has been extended till Sunday.

“For now, these are military-to-military communications, so obviously, then political dialogue will take place,” he said. “The resolution of all issues lies there.”

Also on Thursday, India’s Foreign Minister Subrahmanyam Jaishankar said a key water treaty, which governs river water critical to parched Pakistan for consumption and agriculture, would remain suspended until “cross-border terrorism by Pakistan is credibly and irrevocably stopped.” New Delhi suspended the treaty a day after the April 22 attack.

Dar responded by calling the treaty “a no-go area.”

“The treaty can’t be amended, nor can it be terminated by any party unless both agree,” he told parliament.

Militants have stepped up operations on the Indian side of disputed Kashmir region since 2019, when Prime Minister Narendra Modi’s Hindu nationalist government revoked the region’s limited autonomy and imposed direct rule from New Delhi.
 

Topics: Ceasefire Pakistan India Ties Day of Gratitude

Back on the pitch: Pakistan Super League resumes after conflict-forced suspension

Updated 16 May 2025
AP
Follow

Back on the pitch: Pakistan Super League resumes after conflict-forced suspension

  • The Pakistan Super League was suspended on May 9 but last weekend Pakistan and India agreed to a ceasefire
  • The Indian Premier League, also suspended due to the outbreak between the countries, will also resume this weekend
Updated 16 May 2025
AP

ISLAMABAD: Pakistan’s premier Twenty20 cricket tournament resumes Saturday after a ceasefire between India and Pakistan was achieved. There will be a handful of foreign players returning for the remaining eight games.

The Pakistan Super League was suspended on May 9 but last weekend Pakistan and India agreed to a ceasefire after talks to defuse their most serious military confrontation in decades.

The Indian Premier League, also suspended due to the outbreak between the countries, will also resume this weekend.

PSL organizers first proposed moving the tournament to Dubai but later decided to postpone it after foreign players were reluctant to participate in the tournament due to security concerns. Around 43 foreign cricketers — competing on six PSL teams — were flown out of Pakistan from an air base in Rawalpindi.

Rawalpindi will host the remaining four league matches between May 17-19 before Lahore hosts the playoffs from May 21, including the final at Qaddafi Stadium on May 25.

Zimbabwean all-rounder Sikander Raza is among some of foreign players who have returned to Pakistan. Raza, who plays for Lahore Qalandars, is available for Lahore’s crucial last league game against Peshawar Zalmi on Sunday before he flies to England for test duty starting next week.

Raza will not be available for Lahore if the two-time champions qualify for the playoffs due to his test commitments.

He said that if the PSL resumed, he planned to return to Pakistan, even for just one match.

“I was very clear in my head that I was always going to go back,” Raza told The Associated Press as he trained with his teammates at Islamabad Club ground on Thursday.

“This PSL is not just about winning a trophy, there’s a lot more to it. All the overseas (players) that have come back, whether they’re in Pakistan or India, I think credit must be given to them because cricket unites and the whole purpose of sports all around the world is to unite cultures, countries.”

Lahore will also have Sri Lanka batter Bhanuka Rajapaksa and Bangladesh all-rounder Shakib Al Hasan for its must-win last league game against the Babar Azam-led Peshawar side after Tom Curran and Daryl Mitchel were ruled out due to injuries.

Raza said it was tough for the families of all the players living abroad after there was escalation at the borders.

“Whether it’s Pakistan or India, what happened was tough for everybody,” Raza said. “Sometimes when you’re on the ground, things may not be as bad, but (for) people back home watching TV, sometimes it’s very hard to control what media tells you.”

Lahore team director Sameen Rana said it was important that the PSL returns to finish the season.

“There’s a lot of uncertainty and the conditions which were happening on the ground was not the best, it’s unfortunate,” Rana said. “But from our perspective . . . the important thing is that the PSL is resuming, and that’s what matters.”

Defending champions Islamabad United has brought in Alex Hales of England and Rassie van Dussen of South Africa after initially picking both of them in the supplementary draft while Ben Dwarshuis of Australia is flying back to rejoin the team.

Islamabad, the three-time PSL champions, won five games in a row at the start of the season before four successive defeats.

Finn Allen of New Zealand and Rilee Rossouw of South Africa are rejoining first-place Quetta Gladiators, who have 13 points, three points ahead of Karachi and Islamabad.

Karachi is expecting to have its captain David Warner back from Australia in time to lead the team against Peshawar on Saturday.

Topics: Pakistan Super League (PSL) PSL X

IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

Updated 16 May 2025
Follow

IMF may disburse first tranche of climate loan to Pakistan in ‘about six months’

  • Lender to approve first climate loan payment with the second review of Pakistan’s External Fund Facility program, says source
  • Pakistan’s finance adviser says loan, linked to implementation of key performance indicators, to be released over next 28 months
Updated 16 May 2025
Ismail Dilawar

KARACHI: The International Monetary Fund (IMF) is likely to release the first tranche of its $1.4 billion climate resilience loan for Pakistan “in about six months,” a source with direct knowledge of the development told Arab News on Thursday. 

The IMF last Friday approved a fresh $1.4 billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion External Fund Facility program, freeing about $1 billion in cash.

The Washington-based lender is expected to start the Resilience and Sustainability Facility (RSF) funding for Pakistan along with its second review of Islamabad’s EFF program, the source disclosed on condition of anonymity as they are not authorized to speak to media on the matter. 

“With the second review of the EFF, if the [IMF] board approves then they [Pakistan] might get the first tranche of the RSF, ” the source said, adding that the next EFF review is expected to take place “in about six months.”

“For climate financing, nothing will be disbursed now,” they added. 

Pakistan’s finance adviser Khurram Schehzad said the climate loan is not a “one-off payment.”

“The RSF fund will be released gradually over the next 28 months, which is linked to the implementation of 13 KPIs (key performance indicators),” the official told Arab News.

He did not elaborate how much the global lender would release as part of the first tranche.

The RSF will support Pakistan’s efforts in building economic resilience to climate vulnerabilities and natural disasters. The South Asian country has been consistently ranked as one of the worst affected countries due to climate change effects. 

In 2022, Pakistan was devastated by flash floods triggered by unusually heavy rains and the melting of glaciers. The catastrophe killed 1,700 people, displaced more than 30 million others and damaged crops and infrastructure worth $30 billion.

That forced Pakistan last year to request the IMF for the RSF fund to address its vulnerability to climate change.

The IMF on May 9 approved the much-awaited climate loan for Pakistan and disbursed the $1.02 billion as its first tranche under the EFF program on May 13.

The Washington-based lender is scheduled to hold its second EFF review of Pakistan’s economic performance on Sept. 15, Sana Tawfik, the head of research at Arif Habib Ltd., said, citing the IMF’s Pakistan Country Report 2024.

When asked if the next IMF review will be delayed, the source replied in the negative. 

The RSF funds are crucial for Pakistan as its dwindling foreign exchange reserves rose to $10.3 billion last week. This amount does not meet the IMF’s three-month import cover threshold requirement.

In its monetary policy statement on May 5, Pakistan’s central bank said delays in the realization of official inflows coupled with “large debt repayments” weakened net financial inflows into the country till March.

Pakistan, which narrowly averted a sovereign default in 2023 after a last-gasp IMF bailout package, owed about $26 billion debt repayments this year ending June. While most of its foreign debt has been repaid, the country still relies heavily on the IMF’s funds to keep its balance of payment position in check.

The central bank expects the country’s foreign reserves to increase to $14 billion by June “on the back of the expected realization of planned official inflows.”

“This build-up in FX reserves to continue in FY26, based on a moderate current account deficit and improved financial inflows,” the SBP said in its statement.

Topics: IMF in Pakistan climate financing

Latest updates

Thai monk arrested over $9 million temple embezzlement
France sues Iran at top UN court over detained citizens
Jihadists in Nigeria turn to TikTok to spread propaganda
Israeli strikes kill at least 20 people in Gaza as Trump wraps up his Middle East visit
'Want change': in Spain, far right finds support with Romanians far from home

Search form

Print Edition
Read pdf version Subscribe now
© 2025 SAUDI RESEARCH & PUBLISHING COMPANY, All Rights Reserved And subject to Terms of Use Agreement.