Finance Minister Ishaq Dar has said that China and Saudi Arabia have agreed to provide $13 billion package to Pakistan. During an informal talk with journalists, the finance minister divulged that during current fiscal year, China apart from rolling over its loans, will provide $8.8 billion financial support to Pakistan which includes $3.3 billion loans from Chinese commercial banks and $1.45 billion additional financing. Dar said that there was likelihood of additional $4.2 billion financial assistance from Saudi Arabia which includes $3 billion additional package and supply of Saudi oil on deferred payment. Saudi Arabia will also build a $10-12bn petrochemical refining project at Gwadar, the finance minister said adding that the leadership in China and KSA assured Prime Minister Shehbaz Sharif of their cooperation.

Apart from this, Pakistan was also engaging the KSA in privatization transactions like in LNG power projects and shares in other entities to ensure non-debt creating foreign inflows.Dar said there was an understanding that both the countries would take care of the financial needs of Pakistan till June 2023. The minister said that China agreed to accelerate speed of work on the construction of ML-1 and Karachi Circular Railway. Pakistan is struggling with the low foreign exchange reserves, bad credit rating by the international financial agencies and the devaluation of its currency.

During his talk, minister insisted that the rupee’s real effective exchange rate (REER) was around Rs194 per dollar, even lower than Rs200. He hoped that the stakeholders would keep in mind the national interest instead of indulging in profitmaking.During an interview with the PTV on Friday, the finance minister said he believed in the market based exchange rate but some handful speculators could not be allowed to make the rupee hostage. He said the appreciation of rupee would also help tackle the issue of inflation. The minister said the government had decided not to approach the Paris Club for rescheduling of debt.

Credit : Independent News Pakistan-INP