ISLAMABAD - Pakistan hopes to receive $3 billion from Saudi Arabia next week which would build the draining foreign exchange reserves of the country.

The State Bank of Pakistan’s spokesperson Abid Qamar has said that SBP has already signed an agreement with Saudi Arabian government for keeping three billion dollars in its account. He informed The Nation that Pakistan may receive the amount from next week. However, he did not share exact date.

Saudi Arabia on October 23 had pledged to provide $6 billion to Pakistan on an annual basis in the shape of cash assistance and oil on deferred payments for one year. Pakistan’s Prime Minister Imran Khan had requested Saudi Arabia to give bailout package to reduce its economic crisis. Saudi Arabia would place $3 billion cash deposits in the account of State Bank of Pakistan. In addition, it would also provide a one-year deferred payment facility for the import of oil, worth up to $3 billion, according to the Foreign Office.

Pakistan’s foreign exchange reserves would increase with the inflow of Saudi’s loan. The reserves held by the SBP are expected to go beyond $10 billion. “During the week ending 26 October, 2018, SBP’s reserves decreased by $48 million to $7,777 million, due to external debt servicing and other official payments,” the SBP said in a statement. However, the reserves would continue to fall in the months to come due to repayment on loans. According to an official of Economic Affairs Division, Pakistan would repay $718 million as previous loan in the ongoing month (November), which would reduce the reserves. In November 2018, the government will have to repay $572 million as principal and $146 million as interest payment on loans.

The Saudi Arabia’s $3 billion is stopgap financing, which would help in averting the balance of payment crisis before IMF programme. The IMF programme will require six to eight weeks for approval after things settle in the talks that would start from November 7.

Meanwhile, Pakistan is also negotiating with China and United Arab of Emirates for some bailout package.

Meanwhile, the facility of deferred oil payment would become effective from the current month. This facility would ease pressure of the import bill of the country, which had gone to $60 billion last fiscal year. Due to the massive increase in imports, Pakistan’s current account deficit had recorded at $18 billion that eroded the country’s foreign exchange reserves.