Pakistan ‘returns’ $1b of Saudi soft loan

ISLAMABAD:

Pakistan has returned $1 billion to Saudi Arabia as a second instalment of a $3 billion soft loan, officials said on Wednesday.

With the $1 billion flowing out, Pakistan -- which has $13.3 billion in the State Bank of Pakistan reserves -- could face a balance of payments issue after clearing the next Saudi instalment.

"China has come to our rescue," a Foreign Office official told Reuters. A finance ministry official said Pakistan's central bank was already in talks with Chinese commercial banks.

"We've sent $1 billion to Saudi Arabia," he said. Another $1 billion will be repaid to Riyadh next month, he said. Islamabad had returned $1 billion in July.

Saudi Arabia gave Pakistan a $3 billion loan and a $3.2 billion oil credit facility in late 2018.

The People's Bank of China did not respond to a Reuters request for comment, and Riyadh didn't issue any details.