Pak-rupee slightly gains amid $20bn investment deal with Saudi Arab

KARACHI: After signing investment deal with Saudi Arabia (SA) of $20 billion in energy, oil and other, the US dollar lost 20 paisas in the Interbank and open currency market on Monday.

The dollar is being traded at Rs 138.70 in the interbank market, down by 20 paisas from the previous day’s closing rate of Rs 138.90 in the interbank market while it closed at Rs 137.90 in open currency market.

“Pak rupee may further strengthened in the interbank and open currency market as the Crown Prince Mohammad Bin Salman announced to open more trade deal with Pakistan,” the analyst said.

Saudi Crown Prince of Saudi Arabia has agreed to provide much needed support to Pakistan and signed different trade deals of $20 billion. Pakistan was facing $18.9 billion balance of payment crisis in 2018 when the PTI’s Imran Khan took charge of the government.

Since taking charge in last August, the PTI government has been trying to seek help from friendly countries to avoid a default on foreign payments. After much delay, the government formally requested the IMF for assistance, but also sped up efforts to secure dollar loans from friendly countries such as China and Saudi Arabia.

Earlier, the kingdom has agreed to extend $3 billion in deposits and another $3 billion in oil credit to Islamabad. The Saudi government had already given $3 billion financial support to Pakistan. Pakistan is suffering a financial crisis. It has only $8 billion left in foreign reserves and is looking to international backers for support.

In today’s deal, the funding for an $8 billion oil refinery in the city of Gwadar is included.

Saudi Arabia and Pakistan signed agreements and memorandums of understanding in the energy, petrochemicals and mining sectors, according to reports.

Prime Minister Imran Khan has been seeking help from friendly countries in order to cut the size of the bailout package his country is likely to need from the International Monetary Fund, under very strict conditions.

The country is seeking its 13th bailout since the late 1980s and Saudi Arabia has already provided a $6 billion loan.

Of the latest deals, Prince bin Salman said: “It’s big for phase one, and definitely [our commercial relationship] will grow every month and every year, and it will be beneficial to both countries.

 

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