Pakistan, Saudi Arabia to discuss extending term of $3 billion loan

Pakistan and Saudi Arabia say they will discuss extending the term of a $3 billion loan to help Islamabad’s faltering economy.

The Gulf nation has long been an intelligence partner of Pakistan as well as a regular source of financial relief for successive governments.

The latest sign of support follows a visit to Saudi Arabia by new Prime Minister Shahbaz Sharif, who has inherited a crippling national debt, galloping inflation and a feeble rupee.

A joint statement says the kingdom would continue to support the Pakistani economy and had discussed “augmenting the $3 billion deposit with the central bank through term extension or otherwise.”

Saudi Arabia also pledged “to further enhance the financing of petroleum products” at a time when the South Asian country is suffering from frequent power cuts.

The statement comes after recent talks between Pakistan and the International Monetary Fund (IMF) over the release of funds under an existing $6 billion aid program that had stalled due to concerns about the pace of reforms.

The cash-strapped nation’s foreign exchange reserves plunged below $11 billion last month.

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