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'Good news': Shaukat Tarin confirms SBP's receipt of $3bn deposit from Saudi Arabia

Dalit

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Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin announced on Saturday that the State Bank of Pakistan (SBP) had received Saudi Arabia's $3 billion deposit and thanked the kingdom and its crown prince for the "kind gesture".

"Good news, $3bn Saudi deposit received by SBP. I want to thank His Excellency Crown Prince Mohammed Bin Salman and [the] kingdom of Saudi Arabia for the kind gesture," the adviser tweeted.


The agreement was reached during Prime Minister Imran Khan's visit to the kingdom in October. Apart from the support package, Saudi Arabia had also agreed to provide $1.2bn worth of oil supplies on deferred payments.

The deal cleared its last legal hurdle last month when its summaries were approved by the prime minister and the cabinet.

On Monday, the SBP signed the agreement with the Saudi Fund for Development to receive the amount, which would be placed in the SBP’s account with an aim to improve its foreign exchange reserves.

When the SBP was officially contacted to know the agreed rate of return on the Saudi fund as there were massive speculations in the financial market about the rates being given on $3bn, it had stated: “As per agreement all terms are confidential and cannot be revealed without the consent of both the parties.”

The issued press release had further stated the fund would help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the Covid-19 pandemic.

The SBP said the deposit agreement reflected the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and would further augment the economic ties between the two brotherly countries.


This is today the shambolic state of the economy. They are speculating about the interest rate and they won't even share the details.
 

Patriot forever

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Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin announced on Saturday that the State Bank of Pakistan (SBP) had received Saudi Arabia's $3 billion deposit and thanked the kingdom and its crown prince for the "kind gesture".

"Good news, $3bn Saudi deposit received by SBP. I want to thank His Excellency Crown Prince Mohammed Bin Salman and [the] kingdom of Saudi Arabia for the kind gesture," the adviser tweeted.


The agreement was reached during Prime Minister Imran Khan's visit to the kingdom in October. Apart from the support package, Saudi Arabia had also agreed to provide $1.2bn worth of oil supplies on deferred payments.

The deal cleared its last legal hurdle last month when its summaries were approved by the prime minister and the cabinet.

On Monday, the SBP signed the agreement with the Saudi Fund for Development to receive the amount, which would be placed in the SBP’s account with an aim to improve its foreign exchange reserves.

When the SBP was officially contacted to know the agreed rate of return on the Saudi fund as there were massive speculations in the financial market about the rates being given on $3bn, it had stated: “As per agreement all terms are confidential and cannot be revealed without the consent of both the parties.”

The issued press release had further stated the fund would help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the Covid-19 pandemic.

The SBP said the deposit agreement reflected the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and would further augment the economic ties between the two brotherly countries.


This is today the shambolic state of the economy. They are speculating about the interest rate and they won't even share the details.

Bro it is 3.8%. Its known for a while.

The rest of the condition is Pakistan can not roll over this debt, has to pay back after 1 Yr.

I do not know about if there are any geo political conditions or the likes regarding the agreements but the financial terms are clear.
 

SuvarnaTeja

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Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin announced on Saturday that the State Bank of Pakistan (SBP) had received Saudi Arabia's $3 billion deposit and thanked the kingdom and its crown prince for the "kind gesture".

"Good news, $3bn Saudi deposit received by SBP. I want to thank His Excellency Crown Prince Mohammed Bin Salman and [the] kingdom of Saudi Arabia for the kind gesture," the adviser tweeted.


The agreement was reached during Prime Minister Imran Khan's visit to the kingdom in October. Apart from the support package, Saudi Arabia had also agreed to provide $1.2bn worth of oil supplies on deferred payments.

The deal cleared its last legal hurdle last month when its summaries were approved by the prime minister and the cabinet.

On Monday, the SBP signed the agreement with the Saudi Fund for Development to receive the amount, which would be placed in the SBP’s account with an aim to improve its foreign exchange reserves.

When the SBP was officially contacted to know the agreed rate of return on the Saudi fund as there were massive speculations in the financial market about the rates being given on $3bn, it had stated: “As per agreement all terms are confidential and cannot be revealed without the consent of both the parties.”

The issued press release had further stated the fund would help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the Covid-19 pandemic.

The SBP said the deposit agreement reflected the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and would further augment the economic ties between the two brotherly countries.


This is today the shambolic state of the economy. They are speculating about the interest rate and they won't even share the details.


Bro it is 3.8%. Its known for a while.

The rest of the condition is Pakistan can not roll over this debt, has to pay back after 1 Yr.

I do not know about if there are any geo political conditions or the likes regarding the agreements but the financial terms are clear.

Yes. Interest rate is 3.8%



Cabinet approves $4.2b Saudi loan package | The Express Tribune
Minister says much-need hard cash to help stabilise exchange rate
tribune.com.pk
tribune.com.pk

Cabinet approves $4.2b Saudi loan package
Minister says much-need hard cash to help stabilise exchange rate


Shahbaz RanaNovember 28, 2021

prime minister imran khan chairs meeting of the federal cabinet held in islamabad photo pid file


Prime Minister Imran Khan chairs meeting of the federal cabinet held in Islamabad. PHOTO: PID/FILE
ISLAMABAD:
The federal cabinet on Saturday approved two loan agreements worth $4.2 billion reached with Saudi Arabia, including the $3 billion cash deposit that the kingdom has extended for a period of one year but can withdraw it anytime by giving a three-day notice.
Pakistan will pay 4% interest on the cash deposit and 3.8% on the oil on deferred payment facility, according to the terms agreed between both countries. Unlike in the past, this time there is also no option for rollover of the Saudi loan and the country will have to return it at once after one year.
“The cabinet has approved the $3 billion cash deposit agreement and $1.2 billion oil on deferred facility agreement through the circulation of summaries,” Federal Minister for Information and Broadcasting Fawad Chaudhry confirmed to The Express Tribune. The minister said that the Saudi package will also help stabilise the rupee-dollar parity.
The finance ministry sources said that the $3 billion cash facility has been secured at an interest rate of 4%. The rate is by one-fourth times higher than the previous similar facility that Pakistan had obtained at a 3.2% interest rate.
At the new rate, Pakistan will pay $120 million interest on the loan – up by $24 million when compared with the 2018 similar facility.
At the conclusion of Prime Minister Imran Khan’s visit to the kingdom last month, Saudi Arabia had announced financial assistance to Pakistan.
Read Foreign loans swell 18% in Jul-Oct
The sources said Pakistan had to accept tough loan conditions due to the prevailing external sector vulnerabilities. They added that talks for another similar loan facility from a friendly country were also underway, which were expected to be concluded soon.
The cabinet also approved to avail $100 million per month oil facility on deferred payment for one year. “The country will pay 3.8% interest on the amount,” said the sources.
The sources said that under the agreement Pakistan will repay $3 billion to Saudi Arabia no later than one year from the date of the deposit. Saudi Arabia can also demand to immediately return the money in case of a sovereign default by Pakistan, said the sources.
According to another important clause of the agreement, the sources said, Pakistan will be bound to return $3 billion to Saudi Arabia within 72 hours of a written request by Saudi Arabia at any time during the term of the agreement.
“Saudi Arabia has also spelled out the terms of defaults, which would lead to the immediate withdrawal of the cash deposits,” said the sources.
A delay in timely interest payment would be deemed as default on the agreement. The failure by Pakistan to comply with any provision of the cash deposit agreement will lead to default. Also, Pakistan’s failure to service the public external debt of over $100 million will be deemed as default, said the sources.
An end to the IMF membership will also be treated as default, said the sources.
Read more Pakistan’s debt, liabilities cross Rs50tr
The finance ministry sources said that in case of a dispute, Saudi law will be applicable. However, Pakistan has surrendered its sovereign claim of immunity from suit, execution, attachment or other legal processes in relation to the $3 billion cash deposit agreement, the sources added.
The Express Tribune had sent questions to the finance ministry spokesperson, Yousaf Khan, who is also the additional secretary in-charge. But till the filing of the story, the ministry did not reply to the questions about the cost of the $3 billion borrowing, the time period of the lending facility and the reasons for surrendering the sovereign immunity.
The sources said that the office of the Attorney General for Pakistan had cautioned the finance ministry that waiver of the sovereign immunity may carry serious implications for the country.
However, the finance ministry sources said that such an eventuality would never occur as Pakistan never defaulted on its international payments obligations.
 

Waterboy

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How is this government any different from N? they're exactly doing the same thing and bankrolling the economy on loans. The only difference is they're incompetent and can't even do this properly.
 

Dalit

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Bro it is 3.8%. Its known for a while.

The rest of the condition is Pakistan can not roll over this debt, has to pay back after 1 Yr.

I do not know about if there are any geo political conditions or the likes regarding the agreements but the financial terms are clear.

They are high fiving each other and celebrating. This is not what Imran Khan promised.
 

Sal12

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IK Govt took $32B in loans in 3.5 years. $17B was used for previous loan payments and rest were used for Govt's own expenses.
 
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Patriot forever

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They are high fiving each other and celebrating. This is not what Imran Khan promised.

Bro its simple, Pakistan has long term economic problems will require hard decisions and patience.

Saudi Arabia helped us back in 2018-2019 when we were definitely going under. It was clear writing on the wall, we had payments due to a tune of $14b with $7b in SBP reserves. We were loosing almost billions of dollars each month apart from the payment just because of overvalued rupee and $2b+ CAD each month continously. They came forward and helped us both UAE and Saudis at the most crucial time.
We should appreciate their gesture.

There were rumors of Washingtoninvolvement to delay this $3b as well, that's where the speculation in the market was about.

If we comply fully with what Washington wants IMF will give money tomorrow, that's the whole dilemma. We are not in a position to make our debt payments without IMF ( in short they got us by our balls, that I agree with you completely).

Pakistan has resisted Washington for a while now especially regarding Afghanistan. Biden has a lot of Tommy's he wants to bring to power in Pakistan. E~
 

Patriot forever

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IK Govt took $32B in loans in 3.5 years. $17B was used for previous loan payments and rest were used for Govt's own expenses.


That is complete bullshit Bro.

The government took more than $40b and paid more than $30b by last year end ( estimate). The remaining major chunk is in SBP reserves ( SBP reserves were $7b when pti took over not they are around $16).

Our debt payments are $12 - $16b per year alone.

Just sharing you the payments both principal and interest in FY 2021 to give you an idea.
 

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Sal12

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That is complete bullshit Bro.

The government took more than $40b and paid more than $30b by last year end ( estimate). The remaining major chunk is in SBP reserves ( SBP reserves were $7b when pti took over not they are around $16).

Our debt payments are $12 - $16b per year alone.

Just sharing you the payments both principal and interest in FY 2021 to give you an idea.

There was $95B debt at the end of PML N Govt. The debt is $127B now or perhaps more than $130B if we also add recent $3B for Saudia loan. So if $30B loans are repaid then total loan should not have been more than $105B as per your logic which is not the case. Please don't tell me the rest is accumulated due to interest rates,
 

Arulmozhi Varman

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Akhir Kab tak?

When will people of Pakistan realize they need to start exporting and stop importing.

Quite respectfully this argument doesn't make sense always. Till this date, India has always imported more than exports. But we also get some money from services and remittances and so does Pakistan.

The problem is transparency. In India it's almost impossible to get an loan in such secrecy. The terms had to laid out, discussed, published and then agreed. Our own state govt's deal directly with IMF or WB based on our Reserve bank guidelines. And if a project isnt feasible enough, approvals are not provided to approach banks. If this process was transparent then Pakistan wouldn't have been in there in the first place. A project like CPEC for example, should have been discussed with all Public on the terms and conditions etc befor going forward. I don't think the ruling class did any discussion, just went forwarded and pushed it. Imagine small other projects.
Blame goes to the Military too. Pensions in India comes under military budget while in Pakistan it comes under civilian budget.
 

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