ISLAMABAD, 27 October 2021, (TON): Information Minister Fawad Chaudhry said “Saudi Arabia has agreed to provide a $4.2 billion lifeline to Pakistan on an annual basis in the shape of cash assistance and oil on deferred payments.”

The information minister said “Saudi Arabia would deposit $3 billion cash in the State Bank of Pakistan and also provide $1.2 billion worth of oil on deferred payments.”

It is the second financial assistance package that the kingdom has extended to Pakistan in the past three years, aiming to help the country manage a brewing external sector crisis. The kingdom had extended a similar package valuing at $6 billion in October 2018 to provide a breathing space to

Pakistan before the country went to the International Monetary Fund for an extended loan facility.

The latest development came a day after Prime Minister Imran Khan returned from a three-day trip to the kingdom.

A federal minister said that the Saudi government would charge interest rate that will be around the cost of debt taken from the international financial institutions. Last time, Saudi Arabia had charged about 3.2% interest rate on its $3 billion cash deposit.

Saudi Arabia has agreed to provide financial assistance to Pakistan at a time when the talks between the PTI-led coalition government and the IMF are facing a delay, resulting in holding up of the release of the next loan tranche amounting to $1 billion.