Prime Minister Nawaz Sharif meets Saudi Arabian Crown Prince Salman Bin Abdul Aziz at PM House, Islamabad on February 17, 2014. PHOTO: PID/FILE
ISLAMABAD: The "friendly Muslim country" that a beaming Ishaq Dar had referred to during his press conference on Wednesday, was revealed to be Saudi Arabia on Thursday, having loaned cash-strapped Pakistan $1.5 billion this week to shore up its reserves.
Pakistan had last month sought Riyadh's help to shore up its foreign exchange reserves and meet debt-service obligations and undertake large energy and infrastructure projects, Pakistani officials have told Reuters.
The cash injection boosted reserve figures and helped the rupee rise to a nine-month high against the greenback of Rs97.40 from 105.40 against the dollar between March 4 and 12. This is the strongest rally of the rupee in 30 years.
"On a personal guarantee of the prime minister, Saudi Arabia has given $1.5 billion, which has helped bail out the rupee," one senior Pakistani government official close to the deal told Reuters, requesting anonymity as he was not authorized to disclose the source and purpose of the funding.
The governor of the Saudi central bank declined to comment, and officials gave no details of the loan terms.
Another top official who is based in Lahore said the money went into an account known as the Pakistan Development Fund set up to channel money from "friendly countries" like Saudi Arabia and the United Arab Emirates.
"We have a promise of a total $3 billion, of which $1.5 billion has been received so far," the second official said. "Most recently, we got $750 million from the Saudis."
Prime Minister Nawaz Sharif has long enjoyed close relations with the Saudi royal family. After his second term as prime minister was ended by a military coup in 1999, he was sent into exile in Saudi Arabia.
Prince Alwaleed bin Talal, the Saudi financier and member of the ruling House of Saud, had dubbed Nawaz as "Saudi Arabia's man in Pakistan".
Pakistani Finance Minister Ishaq Dar confirmed on Wednesday that $1.5 billion was received under the development fund but declined to comment on the source.
"Why do you want to expose our friends?" he told reporters. "The countries who have helped us don't want us to disclose the source."
New fund
Dar announced the creation of the new fund on February 18, the same day Saudi crown prince and deputy prime minister Salman Bin Abdulaziz Al Saud concluded a three-day-visit to Pakistan.
Pakistan's new army chief, General Raheel Sharif, also met King Abdullah and top Saudi military commanders during a trip to the kingdom two weeks before the new account was set up.
Other high-profile Saudi visitors to Pakistan this year have included Saudi Foreign Minister Saud Al Faisal and Prince Salman bin Sultan, the country's deputy defense minister.
According to the finance ministry, gross official reserves - including the latest injection of $1.5 billion - stood at $9.52 billion on March 11. A third loan tranche of $550 million from the International Monetary Fund, expected before the end of March, will push reserves close to $10 billion.
Pakistan is expected to receive $150 million from the Islamic Development Bank in March, as well as $150-200 million under the Coalition Support Fund, reimbursements for assistance in the US-led coalition's Afghanistan war effort.
Pakistan has delayed its launch of Eurobonds worth $500 million to May and plans to raise billions of dollars in privatisation revenue by June.
The government also expects to raise over $1 billion through the auction of spectrum licences.
An increase in foreign investment and remittances by overseas Pakistanis has also helped lift the rupee. Remittances increased by 11 per cent to $10.2 billion during the first eight months of this fiscal year.
The finance ministry has also attributed the currency's recovery to punitive action against exporters withholding export receipts abroad and warnings to foreign exchange speculators.
COMMENTS (89)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@Thank You, wish if there any dislike button...
after america we can save Saudi interests in syria, Saudi has been humiliated in Syria,
guys this is a do or die matter for Saudi ,
bargaining for 10 billion like Egypt doesnt sound well coz Egypt is in Arab peninsula ,while they can use Pakistanis for proxies the way they used in Afghanistan.
for Pakistani they should not be ashamed of coz thats what their expertise they have ,so every country sells their best ,even Saudi and UAE acquired US expertise to protect them during 1991 Iraq war so what ,its not a big deal ,remember this nurseries has been set up in cold war,now you can expect to have apple and mangoes from those nurseries.
Saudi oil for Pakistani human resources blood money
all of you, have not had any night without food and live abroad mostly ,have access to internet and have decent access to basic economics of life
now,the money you get that's it, it is trap
Thankyou Saudi Arabia. A friend in need is a friend indeed. Has our other neighbour enough guts to support us in our time of need? Certainly not. One can say it is under sanctions and therefore cannot. But the question is when the sanctions were soft before, did it ever showed any such supportive gesture? The answer is NEVER. Infact, talking about gas pipeline, it is in reality Pak supporting the neighbour which cannot sell its oil/gas due to sanctions and desperately needs $ for its own use. And that too at exorbitant prices which are never heard of in the market, and are irrevocable. Terming it a friendship offer is gross mis-representation. This neighbour has always ditched us even when it disclosed to the world that Pakistan provided it the nuclear know-how. Alas, a wolf in the sheep garb....
Total amount promised is $ 3 billion. 50% of this money i.e., $1.5 billion advance payment received now. Balance $1.5 billion to be paid after the job is finished. Sounds like what gangsters call "Supari" ....50% down payment and 50% after job is done.
@Umer:
oh yes ! i can bet he has more than that....& pity is, if all our looted money by these politicians are brought back as was promised by NS / SS during their election...NS govt did not need to beg from the Saudis....but regretfully, we are a spineless nation with spineless leaders with no self-respect.....
@farheed kashmir..."on one hand Sunni pakistan cannot stand on her feet and I wonder how they will protect us ones we come ther?" That's the thing fareed when religion is mixed into politics...all different sects within religion and other religion become wary, suspicious,fearful of each other...instead of keeping how u pray at home..and govern without bias of religion ethnicity caste creed... We have people talking more about perfecting religious laws than governance,business,economics... And that how a country suffers..because it looses more time in debating who's right according to holy books...than who's right according to economic parameters...hope better sense prevail in pakistan..and hands of all sane and liberal Pakistanis are strengthened.
@Tahir: Like your mentor Mr.Zaid Hamid, you don't let facts come in the way of your narrative. India is not officially a Hindu nation. The only Hindu nation is the world is Nepal. Besides, I don't care too much about my nation being identified with a religion anyway. There is a place for religion but that certainly isn't my identity or my country's.
@Thank You:
Please elaborate what "thick and thin" Saudi Arabia has stood by. Saudi Arabia is the only country that is responsible for turning our country into a sectarian battlefield by pumping its petro-dollars into Madrassahs that preach their takfiri ideology.
NO FREE LUNCH... ;)
@Zaid Hamid: Master slave relationship.The slaves are happy for what they got !
There are no free lunches. Pakistan has to pay back. Why cannot Pakistan stand on its feet.??
@Akhtar: Thank you for what begging for help or granting one.
The cat is finally out of the bag. The artificial lift of the currency is revealed, this nation had been wondering the overnight miracle that lifted the dismal economy , thanks God !!! it wasn't through any sustain effort and resulting progress. It would have been a mega miracle and the nation would have I hope the money given by Saudis don't end up in the pockets of corrupt politicans. It was amusing to read that the loan was granted on the personal assurance of the PM as if he is the only honest person to be trusted in this nation and he would alone be responsible for paying it back.
Pakistan's strategy of morphing their subcontinent identity to an Arabic identity is starting to bear fruit. Now they need to stop watching Indian films and soaps. Next they should make Arabic the primary language for education. Lastly, they should start digging all over Pakistan for oil. Presto, before you know it Pakistan will become Al-Bakistan !!
@Mac:
I think Egypt is far better than the ratio suggests!
PTI Media Cell in full action.
@Np:
This country's govt getting loan from all over from IMF, World bank, Saudia etc. Previously Zardari received loans equal to the first 60 years of the country's life. All these loan money where it did go. Why peoples life is not getting better? Do we have anything in the govt to ask questions on behalf of the people who people have voted them and send them to the parliament to work for the them. Parliament has become a debating club. Why NS did not attend the parliament. We did not elect (sorry they elected themselves by fake votes) them to sit at home. Until people will not questions them through media they will not give any answers. NS like to play amir ul momineen.
i find it hard to swallow.. whats wrong in being 'saudia arabia's Pakistan'?? thats trillion times better than dying of hunger, target killings, bomb attacks, economic failure. Please saudia arabia, make us part of your country, and save us from the ordeal.
We must be the only country in the world which has a price tag on every thing, namely.. foreign policy, army, politicians, mullahs.... just name your price.......we should be ashamed on our selfs
Prince Alwaleed bin Talal dubbed Nawaz as “Saudi Arabia’s man in Pakistan”. We refuse to give up our slavish mentality and revel in it. Does Malaysia... does Indonesia... does Turkey...does Iran??? Salams
Coalition Support Fund (CSF) from the USA for reimbursement of services towards War on Terror and now this bakhshish from KSA to toe the line against syria and Iran.
Pakistan on Grand Sale Shame
Baseless criticism by PTI Nooras. Time will tell that Nawaz Sharif took right decisions.
Whatever PM is doing, that is for the nation. We should support the government. No mega scandal of corruption during last 8 months. If money received is utilized properly, many problems will be solved. I love Nawaz Sharif.
And ministers were beating the drums on media as if they enhanced the value of pak rupees.
and Musharraf was criticized for doctoring the numbers to make economy look better...atleast he did it on the backing of economic activity not on the backing of alms from arabia....the worrying factor is how bad this money will fare for people of Pakistan socially
Why are Hindu Indian commentators so against Pakistan's relationship with Saudi Arabia? How about you stay out of Pakistan's internal affairs.
So should Pakistan rename itself as Al-Bakistan as a show of gratitude?
@Raj - USA:
"Never heard it happen in any other country with an elected government."
More a reflection on you than anything else.
Repeat of the 70s? RIP Pakistan
Thank you Nawaz Sharif and Jazakallah Saudi Arabia.
gift from the in-laws.....!!!!!
Sale proceeds of N-bomb ?
@Arsie: I presume the i in your name was a typo.
@Raj - USA:
Have you ever heard of something called friendship? Saudis trust Nawaz Sharif more than anyone in Pakistan. This doesn't necessarily mean that Pakistan is committed to serve Saudi purpose. It may be like, as they say, helping someone out in the hour of need.
India is the only Hindu country in the world. So events like this will remain enigma to people like you.
The most important point the whole new story is summed up by Prince Alwaleed bin Talal, the Saudi financier and member of the ruling House of Saud, who dubbed Nawaz as "Saudi Arabia’s man in Pakistan” That means Nawaz will look after Saudi interest first before any thing else. What world do we live in? where foreign governments can buy Pakistan to do their dirty job for a petty $1.5bn, that is $8.3 per pakistani citizen assuming total population of Pakistan is 180 million.
The typical shenanigans of the Nawaz government. Using trickery to prop up false indicators of economic revival. These are the same tactics they used in their previous two terms. Fool me once shame on you, fool me twice shame on me.
@ria: @Naseer: if u deploy troops there get ready to go back to stone age….if u already aren’t in….
You misunderstood my comment; I was linking the Saudi AID with Syrian rebels support.
As far as going back to stone age, it can only happen in your dream. We are a live nation and InsahAllah will overcome our problems soon.
You too , Sharifus !!!
@np:
WRONG, Syria is too visible, too low ball and it is almost dead when End User Certificate point comes with the arms purchase.
YES, IP pipeline is plausible as a sacrificial goat.
regards,
Thank You Saudi Arabia a true brotherly country and a friend in need. Unlike the black sheep Iranian regime who pretends to be our friend but sell gas to Pakistan at a very expensive price and make more money than america is making on nat gas ... Iran trying to sell nat gas to pakistan for 14 dollars, compare that with 4 dollar nat gas in america and then forcing a stupid zardari mr 10% govt to sign a deal that favors iran hugely even if the project is not finished because of funding issues, primarily due to sanctions on Iran, it is pakistan who would be paying iran millions. Iran should be recognized as a brotherly enemy not friend! and shame on Iran for abusing a poor country like Pakistan, Saudis are our friends and Iran is NOT!!!
Now it is confirmed that fund inflow is temporary by way of a loan( whose repayment schedule is not disclosed). the price of currency is decided based on the demand and supply rule. Any net surplus inflow increases the supply of dollar and rupee gets appreciated. If this loan is repaid from the additional dollar inflow due to projected rise in export ( thanks to EU for allowing duty free import from Pakistan) the rupee may remain stable or improve further else rupee will reach its level which it deserves.
Reward against suspending operation
@Thank You: So you think its good. Shame on you. You think that your country is going to continue like this forever? Wake up. Start doing something instead of begging the Saudis so that they can promote extremism in your Country. Pathetic. Truly Pathetic.
@Umer: One a guy named 'George Bush' threaten us with the same tone and word.. go and see where his country stands in Afghanistan after 13 years.
@Thank You: " I think its a grant, not a loan"
Saudi Arabia is not a fool to give a grant . any such expectation itself is foolish . unfortunately there is no dearth of mindset of your likes.
"A friend in need is a friend indeed".. The Saudis are our true ancestors. :) To Indian trolls - burn as much as you want to.
Deception as usual and propriety thrown out of the window.
This is a reward for suspending operation against TTP
From hands of one master to another. Sounds like slave.
I don't like it! We can't and we should not let this, “Saudi Arabia’s man in Pakistan” sell us out to whoever he represents and whose interests he is furthering here. we must refuse and reject the PM " “Saudi Arabia’s man in Pakistan” from converting our country into a satellite of Saudi Kingdom. Pakistan is not this PM's fiefdom and we are not his surfs.
Guys, guys, calm down. Why do you presume that Saudis gave the money to Pakistan in return for something? One Arab nation helping out another Arab nation should not come as a surprise. What are brothers there for?!
i am more worried about wht pakistan promised to Saudis for this uncanny benevolence...nuclear proliferation!!!..on the other hand dynamics of macroeconomics in pakistan stay the same as they were...it's like comatised patient on a ventilation...that's not gonna change anything in longrun except for the mischievous projected gdp boost for a month or two.. ...
'Youthians' desperately trying to discredit Nawaz Sharif for the appreciation of Pakistan rupee. The irony of our people.
Syrian rebels r armed with American & European weapons already. I don't see how Pakistani support will make an impact when it's not even pledged. We have committed support in UN only.There's no mention of arming the rebels in joint statement of Pak-Saudi ministers nor the press release of foreign office.
Nawaz Sharif is the man of the moment n inshallah Pakistan will prosper under his leadership.
@Thank You: It is clearly stated that this is a loan. The only country that has ever iven you grants is USA
Where are all the regular ET commentators who routinely bad-mouth KSA for their petro-dollars, Wahabbi ideology, Saudi-funded madrassas, miskeen treatment, etc and say that KSA (along with USA) is responsible for all the ills of Pakistan?
Right, now with $1.5B in the bank, KSA is once again a favorite until that money runs out.
PM's personal guarantee? Does PM have $1.5 to pay if something goes wrong?
@Naseer: if u deploy troops there get ready to go back to stone age....if u already aren't in....
I am not sure why, but everyone has obviously not remembered that its not nawaz sharif who is liable to pay back the money. It is the nation that has to. So when the government so pompously recieves such a huge sum, it is well advised to mention the terms associated with the money. And just to be clear, this is not a request.
'Our economy is doing well... it is not because of these $1.5 billion. . India has $250 billion reserves. Why its currency was suffering? It is economy indicators overall that decide the fate of economy.
Pakistani leadership is selling Pakistan short(=cheap). Egypt got 10 billion dollars from Saudis, you guys settled for 1.5; what a pity?
Good connections coming handy, eh PM? The only thing to be seen is whether we are able to live up to the promise or not!
When we will start deploying our troops to fight in Syria?
I think its a grant, not a loan. Saudi Arabia is the only country that has stood by Pakistan through thick & thin. They gave free oil on numerous occasions and are about to do that again hopefully. Pakistan and Saudi friendship zindabad. Pakistan paindabad.
There we go,and what price do we have to pay to keep these sectarian bigots happy?
Pathetic economic mismanagement. Height of inadequacy.
PAkistanis will now die in Syria. Energy security will be sacrificed by sacrificing IP pipeline.