Saudi Arabia Extends USD 3 Billion Financing Facility For Pakistan

"You don't need to worry as to for how long, given the kind of strategic relationship we have," Dawn quoted him as saying in response to a query that the financing facility had already matured on October 31.

The kingdom provided the USD 3 billion financing in April this year after Pakistan paid back USD 3.5 billion to the United Arab Emirates. Initially, it was provided for three months.

Saudi Arabia had also provided another USD 5 billion to bridge the financing gap, and it had already been extended until 2028, Aurangzeb said.

When asked if Pakistan had also sought additional support, the minister denied it, saying this was not needed as foreign exchange reserves covered more than three months of imports and would be strengthened to provide a four-month import cover by the end of the year through capital markets, according to Dawn.

Responding to another question about the prospects of the USD 10 billion Exchange Stabilisation Support Facility (ESSF) requested from the US in July this year, he sought to lower expectations that he himself had raised over the past several months.

"What we asked for back in July and were looking at was the market access. We have got the market access," he said, referring to the USD 3 billion bond Pakistan issued in September against orders worth USD 6 billion.

"If that (ESSF) materialises, fantastic, it will be a liquidity support facility.

Otherwise, we have plans for further Eurobond issuance, Panda bond issuance and rupee-linked dollar-settled bond," the minister said.

He added that he had held meetings with 70-80 institutional investors in Bangkok, who had a very clear view of Pakistan, and that offers were available for five-year and 10-year maturities, "because clearly we are looking beyond the [IMF] programme".

He said the government was looking at the US from a broader perspective, as the US Export-Import Bank and Development Finance Corporation (DFC) needed to support their investors and exporters in Pakistan. "That is real financing and real credit," he said, adding that the ESSF request was for a liquidity support facility to help the sovereign.

"If possible, fine; if not, we are going to move forward, with or without it."

The finance minister also reported that the International Monetary Fund (IMF) Executive Board meeting to approve a disbursement of USD 1.2 billion to Pakistan would be held in December.

Earlier, he told the Senate Standing Committee on Finance that Pakistan was targeting a reduction of USD 4 billion in external debt during the current fiscal year and USD 3.5 billion next year, compared with USD 4.5 billion in the last fiscal year.

He said the government was seeking to replace expensive short-term borrowing with longer-maturity financing through bonds and private placements to reduce refinancing risks. He said external debt had been rising by USD 5-6 billion annually, from USD 45 billion in 2014-15 to around USD 100 billion, but had increased by only USD 1 billion annually over the past two years, according to Dawn.