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Broke Pakistan gets $8 billion lifeline from Saudi Arabia

Pakistan Prime Minister Shehbaz Sharif with Saudi Arabia Crown Prince Mohammed bin Salman

Saudi Arabia has extended an $8 billion financial package to bail out cash-strapped Pakistan after Prime Minister Shehbaz Sharif visit to the kingdom.

According to local media reports, the package includes a doubling of the oil financing facility, additional money either through deposits or Sukuks, and rolling over of the existing USD 4.2 billion facilities."However, technical details are being worked out and will take a couple of weeks to get all documents ready and signed," Pakistani newspaper The News reported citing top official sources.

The package comes as a lifeline for Pakistan at a time when the country is going through a major economic crisis with runaway inflation and a huge current account deficit which has run down its foreign exchange reserves.

According to the news report, Pakistan's proposal of doubling the oil facility from USD 1.2 billion to USD 2.4 billion was accepted by Saudi Arabia, which also agreed that the existing deposits of USD 3 billion would be rolled over for an extended period up to June 2023.

Prime Minister Shehbaz Sharif and other officials have left Saudi Arabia but Finance Minister Miftah Ismail is still staying there to finalize the modalities of the increased financial package, the news report said.

"Just said goodbye to Prime Minister Shehbaz Sharif and other colleagues at Jeddah Airport, who are on their way to Islamabad after a brief stopover in Abu Dhabi to meet Crown Prince Muhammad Bin Zayed. I remain in SA to meet Saudi officials and start technical-level talks," Ismail tweeted.

Under the Imran Khan government, Saudi Arabia provided Pakistan a package of USD 4.2 billion, including USD 3 billion deposits and a USD 1.2 billion oil facility for one year.