Islamabad, October 24: Pakistan Prime Minister Imran Khan's visit to Riyadh for attending a Saudi investment conference has yielded results as government of Mohammed bin Salman has extended a $6 billion-aid to Islamabad.
As per the agreement inked between two sides, Saudi Arabia would be granting an immediate financial support of $3 billion, followed by another $3 billion-worth assistance in form of deferred payment for oil imports. Thaw in India-Pakistan Ties Soon? Imran Khan to Pitch For 'Friendship' Again After 2019 Lok Sabha Elections.
Despite the Saudi largesse, Pakistan will seek a bailout from the International Monetary Fund, as the country's foreign exchange reserves are at a year-year low, whereas, the central bank reserves have dipped to as low as $8.1 billion.
A delegation from the New York-based IMF is scheduled to arrive in Islamabad on November 7 to negotiate with the Pakistani government on the terms of bailout. Analysts predict the imposition of harsh conditions by the Fund, considering Islamabad's fallout with the United States.
Initially, Khan was reluctant to approach the IMF, and was hopeful of generous grants from Saudi Arabia and all-time ally China to avert the economic crisis. The reluctance to approach IMF stemmed from the potential conditions of another bailout, which would force the new Prime Minister of adopting austerity measures instead of implementing his vision of an Islamic "welfare" state.
Pakistan's Finance Ministry spokesperson Noor Ahmed said the incumbent reserves of the country would allow it to service the debts of pay for imports for nearly two-three months, while also adding that the misgovernance of the erstwhile government led to the widening of current account deficit to $18 billion.