Islamabad:
Saudi Arabia remains the main source of foreign loans cheap for Pakistan, which exceeds $ 5 billion in loans at an annual interest rate of 4% – approximately a third cheaper than Chinese cash deposits and less than half of the cost of foreign commercial loans.
Official files show that Riyad has invoiced an interest rate of 4% on two distinct cash deposit installations obtained by Islamabad in recent years. The loan, initially contracted for a year, has not yet been reimbursed. Government representatives said the kingdom overthrew it each year without imposing additional costs.
A Saudi cash deposit installation of $ 2 billion should mature in December, which the Ministry of Finance plans to reintegrate, sources said. They added that another Saudi loan of $ 3 billion – obtained to fill the external financing lake as part of the IMF program – has laid in June of next year.
The IMF stipulated that the three bilateral creditors of Pakistan – Saudi Arabia, China and the United Arab Emirates – must maintain their deposits in cash until the completion of the three -year program. Together, these countries provided $ 12 billion in deposits, forming most of the central bank exchange reserves of $ 14.3 billion.
Unlike the past, IMF programs no longer help Pakistan. Despite the package, the central bank had to buy more than $ 8 billion on the local market to comply with maturity debts obligations. At the same time, the Ministry of Finance is increasingly depends on credit guarantees for multilateral banks to access international markets, because the “clean health bill” of the global lender is no longer sufficient in itself.
Pakistan and Saudi Arabia have signed this week a historic historic historical defense agreement which, according to the Ministry of Foreign Affairs, reflects the common commitment of the two nations to strengthen security, to promote regional peace and to jointly dissuade any aggression.
To a question of a new Express correspondent concerning the economic aspect of the defense agreement, the spokesperson for the Foreign Affairs Office said that the Pakistani-Saudi relationship was multifaceted. Defense was a very critical and important component. Just as defense is important, economic cooperation is also an important element. But at the same time in the global framework, these are different tracks, said the spokesperson.
He added that the Pakistani-Saudi relationship is supervised by Pakistan-Saudi Supreme Coordination Council, a global frame built on three pillars, one of which is economical. Although these pillars are linked, everyone is designed to strengthen cooperation independently of others. Economic cooperation thus remains robust and we are impatient to further deepen economic cooperation between the two countries, according to the spokesperson.
Sources have said that if Saudi loans have an interest rate of 4%, Pakistan pays approximately 6.1% out of four cash deposit installations worth $ 4 billion. These facilities are at the price of the financing rate of the day after six months (SFR) plus 1.72%, which makes them much more expensive than Saudi deposits. However, the installation of Saudi oil of $ 1.2 million is obtained at a flat interest rate of 6%, added sources.
Chinese facilities, which mature between March and July next year, should also be returned to the light of the conditions of the IMF and the exchange reserves of Pakistan.
Among the most expensive foreign sales loans, there was that of the Chartered Bank Standard, which extended $ 400 million for six months at an interest rate of 8.2% in the last financial year. The loan was contracted in the six -month sifrier plus a margin of 3.9%, sources said.
Likewise, the United Bank Limited organized a loan of $ 300 million for only 10 months at an interest rate of 12 months SFR plus 3.5%, which was also equal to 7.2%, added sources. The water had initially granted a loan of $ 2 billion in Pakistan to an interest rate of 3%, but its last ease of $ 1 billion was obtained at 6.5% in 2024 before the IMF agreement.
Pakistan also obtained a loan of $ 1 billion from commercial banks for a five -year period at an estimated rate of 7.22%. The rate of more than 7.2% is paid despite the fact that the Asian development bank provided partial guarantees to foreign lenders, sources said.
Pakistan also benefits from Chinese sales loans, which are now converted into Chinese currency from the USD. The rates on these Chinese facilities vary. The equality of Chinese commercial facilities of 2.1 billion dollars is refined for a period of three years at around 4.5%, sources said.
Likewise, the Bank of China loan of $ 300 million is taken for two years at 6.5% and 200 million dollars are obtained at 7.3%, added sources. A loan of $ 1.3 billion from the industrial and commercial bank in China was contracted at a stable interest rate of 4.5%.
