Saudis to give Pakistan $3 billion in aid, defer oil payments to ease crisis

Saudi Arabia has agreed to give Pakistan $3 billion in foreign currency support for a year and allow it to defer payments for oil imports to help stave off a current account crisis, Pakistan`s government said on Tuesday.

The agreement came as new Pakistani Prime Minister Imran Khan attended a Saudi investment conference that has been boycotted by several other leaders over the death of a dissident Saudi writer at the country`s consulate in Istanbul.

Khan had said before departing that his country is "desperate" to shore up its foreign currency reserves, which are at a four-year low, equivalent to less than two months` imports and barely enough to make its debt repayments through the rest of the year.

Pakistan Finance Minister Asad Umar earlier this month requested talks with the International Monetary Fund (IMF) for the country`s second bailout in five years. An IMF team is due to visit Pakistan to open negotiations on Nov. 7.

Khan had however sought to avoid going to the IMF and still wants to at least reduce the size of any bailout by appealing to "friendly countries" for bilateral financial support.

Khan had visited Saudi Arabia last month in his first overseas trip since taking office in August, but that trip failed to produce any significant assistance, despite Pakistani media reports of agreements on deferred oil payments.

Pakistan`s Foreign Ministry on Tuesday night announced the latest visit had met with success.

"It was agreed Saudi Arabia will place a deposit of USD 3 Billion for a period of one year as balance of payment support," the minister said in a statement.

"It was also agreed that a one year deferred payment facility for import of oil, up to USD 3 Billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter."

Khan is scheduled to visit China next week.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)