ISLAMABAD - Pakistan might seek financial assistance from Saudi Arabia to avert the balance of payments situation as Islamabad needs $9 billion during current fiscal year.

Pakistan may ask Saudi Arabia to deposit an amount in State Bank of Pakistan’s account to increase its depleting foreign exchange reserves. The government is likely to float the proposal during the upcoming visit of PM Imran Khan to Saudi Arabia in next week. It might be mentioned here that Saudi Arabia had loaned $1.5 billion to Pakistan in 2014 to help Islamabad shore up its foreign exchange reserves, meet debt-service obligations and undertake large energy and infrastructure projects.

“The government is also in touch with Chinese government and banks to provide some kind of loan to avoid International Monetary Fund (IMF),” said an official of the ministry of finance. He further said that government has not decided its future strategy to meet the soaring financing of current account deficit and loan repayments. The government is considering launching a Pakistan Diaspora Bond and Eurobond in next couple of months to attract $2-3 billion in foreign exchange inflows. “The launching of bonds can ease the pressure of foreign exchange reserves, which have fallen by $600 million in last two weeks,” the official informed.

Pakistan foreign exchange reserves are currently under pressure due to widening of current account deficit. The current account deficit might touch $18 billion during ongoing fiscal year. The federal government is working to reduce the current account deficit by $4 billion due to the administrative and regulatory measures. The Economic Advisory Council recently discussed radical steps including a year-long ban on imports for cheese, cars, cell phones and fruits that could "save some $4-5 billion". Similarly, a strategy could be devised to generate additional $2 billion in exports, which could ease the pressure on current account deficit.