KARACHI: Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to extend the tenure of their $7.7 billion short term deposits, a move that will ensure long term forex stability of the South Asian nation, Dr. Abdul Hafeez Shaikh, the prime minister’s adviser on finance and revenue, told Arab News in an exclusive interview.
“Last year, when Pakistan was going through the worst balance of payment (BoP) crisis in our history, we were provided financial support by our brotherly countries,” Shaikh said on Monday.
Pakistan’s friendly countries were approached by the government of Prime Minister Imran Khan soon after assuming the office in 2018 as the country’s current account deficit reached $20 billion.
Responding to Pakistan’s call, Saudi Arabia deposited $3 billion while the UAE and China deposited $2 billion and $2.2 billion, respectively. Qatar also contributed by depositing $0.5 billion with Pakistan’s central bank.
“The $7.7 billion secured from the bilateral arrangements provided the much needed balance of payment support to Pakistan,” he added.
“These are short term deposits placed with the central bank in Pakistan at concessional rates,” the PM’s adviser said, adding: “We are in talks with our development partners to move these deposits toward longer tenors.”
Economists say these deposits provided a lifeline to the country’s economy that had higher imports and lower exports.
“The balance of payment support oxygenated the country’s economy that was much need for its survival. The support helped Pakistan not to default on its foreign payment obligations,” Muzzamil Aslam, senior economist, who is familiar with the developments, told Arab News.
Pakistan’s current account deficit (CAD) was $20 billion in 2018 which declined to $13.43 billion during the last fiscal year. Its further decline is also projected for the current fiscal year (2019-20).
“CAD is projected to decline to $4b [or 1.7 percent of the GDP] in the current fiscal year, compared to $20b when the government took office in 2018,” Shaikh said.
The major balance of payment support came from Saudi Arabia which provided $6 billion in financial assistance to Pakistan, with $3 billion in foreign currency support and $3 billion worth of oil on deferred payments. The agreement was signed during the visit of Prime Minister Imran Khan to the Kingdom in October 2018.
Economists say when Pakistan approached the International Monetary Fund (IMF) for the bailout program, the United States had expressed concerns that the money could be used to pay off debts, especially those taken from China.
“After we started getting the IMF assistance, the fund imposed a condition during the first review of the program to roll over these loans instead of paying them back. This was because the US had misgivings that Pakistan will pay the Chinese debt with the IMF money,” Aslam said.
However, the IMF acknowledged in April that “Bilateral creditors have maintained their exposure in line with debt sustainability objectives of the EFF [Extended Fund Facility].”
China maintained their exposure by renewing $2 billion bilateral deposits in March. Saudi Arabia also refinanced $3 billion BoP support loans that matured in November-January, while the UAE rolled over $1 billion BoP support loans in March. The oil facility with Saudi Arabia – worth $3.2 billion – was activated in August 2019 and has also been providing support to the balance of payments, according to the IMF documents.
Instead of frequent rollovers now, the government wants to convert these short term deposits into long tenors. “The IMF is behind this strategy,” Aslam informed. “The conversion will impact the status of these deposits in a way that loan rates will be decided in line with the international benchmark which may be LIBOR+2-3 percent.”
Economists say the conversion of these deposits will positively impact the economy of the country since Pakistan will get some breathing space and an opportunity to improve its overall financial condition. “It will provide long term forex stability. Otherwise, we will be under pressure to pay back $7.7 billion,” Aslam said.
Pakistan seeks Arab creditors, China to convert $7.7 bn into long term loans — Hafeez Shaikh
https://arab.news/ze345
Pakistan seeks Arab creditors, China to convert $7.7 bn into long term loans — Hafeez Shaikh
- Pakistan received $3 billion BoP support from Saudi Arabia, $2 billion from the UAE and $2.2 from China
- Conversion of short term deposit will provide long term financial stability to the country, say experts
Pakistan urges UN to recover weapons left in Afghanistan, warns militants gaining access
- Pakistan tells the world body TTP and BLA militants are getting support from its ‘principal adversary’
- It maintains militant groups are using new technologies like cryptocurrency to finance their activities
ISLAMABAD: Pakistan on Friday voiced concern at the United Nations Security Council over militant groups like Tehreek-e-Taliban Pakistan (TTP) and the Baloch Liberation Army (BLA) acquiring sophisticated weapons, urging the international community to recover stockpiles left behind by foreign forces in Afghanistan.
Pakistan has previously highlighted that US-led international forces abandoned automatic assault rifles and night vision devices in Afghanistan during their hurried withdrawal from Kabul in August 2021.
The pullout was widely criticized as unplanned and chaotic, leading to Congressional inquiries in the US and intense criticism of former US President Joe Biden’s administration.
However, the previous American government denied Pakistan’s claims, saying all military hardware was intended for the Afghan National Army, which collapsed as the Taliban seized power. US officials acknowledged that these weapons subsequently fell into the hands of the Taliban.
“We know that non-state actors do not have many of the capabilities to manufacture advanced illicit arms, thus raising questions of culpability of certain state actors in these nefarious activities,” Syed Atif Raza, Counsellor at Pakistan’s UN Mission, said during a UNSC meeting on small arms and light weapons management.
“Pakistan is concerned at the acquisition and use of modern and sophisticated illicit arms by terrorist groups such as Tehreek-e-Taliban Pakistan, a UN-listed terrorist organization, which operates with impunity from Afghanistan, as well as the so-called Baloch Liberation Army and Majeed Brigade,” he added.
Raza noted these militant groups possessed lethal weapons left in Afghanistan that were now used against civilians and Pakistan’s armed forces.
“We call upon our international partners to recover the vast stockpile of abandoned weapons, prevent their access to armed groups and take measures to close this thriving black market of illicit arms,” he added.
Pakistan has witnessed a significant uptick in militant violence in its western provinces bordering Afghanistan in recent years.
The Pakistani diplomat asserted that militants receive external support and financing from Pakistan’s “principal adversary,” alluding to India.
He also highlighted that the evolving nature of warfare and new technologies posed challenges in combating the proliferation of increasingly lethal small arms.
“Criminal groups and terrorists are leveraging new technologies such as cryptocurrency for anonymous transactions by using the dark web to evade detection,” Raza said, adding that these technologies also offered more tools to law enforcement to address the situation.
Pakistan forms committee to assess impact of US tariffs, craft policy response
- President Trump announced ‘reciprocal tariffs’ on several countries this week, including a 29 percent levy on Pakistani goods
- The move is expected to hit Pakistan’s textile sector and undermine the country’s efforts to stabilize its fragile economy
KARACHI: Prime Minister Shehbaz Sharif has constituted a high-level steering committee led by the finance chief to assess the impact of a 29 percent tariff imposed by the United States on Pakistani goods and devise a policy response, according to a government notification this week.
The development follows US President Donald Trump’s announcement Wednesday of “reciprocal tariffs” on several countries, a move widely seen as a blow to the global economy still recovering from the COVID-19 pandemic. Trump defended the decision as necessary to correct trade imbalances and what he described as unfair treatment of American goods abroad.
Pakistan’s inclusion in the list of affected nations is of particular concern as the South Asian nation is seeking to boost its export-led growth. The US remains Pakistan’s top export destination, and the imposition of the 29 percent tariff threatens to undercut Islamabad’s fragile recovery efforts.
“Prime Minister has been pleased to constitute steering committee for in-depth analysis and policy responses to recently announced US Reciprocal Tariffs,” read a notification issued by the Prime Minister’s Office on Thursday.
The committee, chaired by Finance Minister Muhammad Aurangzeb, will supervise a working group led by the commerce secretary and finalize policy recommendations.
It will also be responsible for engaging with US officials as needed and updating the prime minister on related developments and initiatives.
According to data from Pakistan’s central bank, the country exported $5.44 billion worth of goods to the US last year.
During the current fiscal, exports to the US reached $4 billion from July 2024 to February 2025, up 10 percent from the same period the previous year.
Textiles account for nearly 90 percent of Pakistan’s exports to the US and are expected to be hardest hit by the new tariffs.
Officials fear the increased cost burden could weaken Pakistan’s position in its main overseas markets, especially if competitors like China, Bangladesh and Vietnam begin diverting goods to Europe after facing steeper tariffs in the US.
The tariff decision is also expected to hamper Pakistan’s broader efforts to stabilize its economy with the support of International Monetary Fund programs.
Global financial markets fell sharply on Friday after China vowed to retaliate with 34 percent tariffs on American goods, raising concerns of an escalating trade war and potential global recession.
Pakistan win toss, bowling in third New Zealand ODI
- The match has been reduced to 42 overs each after a wet outfield delayed the start of the play
- New Zealand have an unassailable 2-0 lead after winning the first two matches by 73 and 84 runs
TAURANGA, New Zealand: Pakistan won the toss and elected to bowl Saturday in the weather-affected third and final one-day international against New Zealand at Mount Maunganui.
The match was reduced to 42 overs each after a wet outfield at Bay Oval delayed the start of play by nearly two hours.
The home side hold an unassailable 2-0 lead after winning in Napier by 73 runs and in Hamilton by 84 runs.
Despite having wrapped up the series, New Zealand have kept nearly the same team as the Hamilton match, only replacing allrounder Nathan Smith with batsman Tim Seifert.
Pakistan have also made one change, with Haris Rauf making way for fellow-pace bowler Naseem Shah.
New Zealand: Nick Kelly, Rhys Mariu, Henry Nicholls, Daryl Mitchell, Tim Seifert, Michael Bracewell (capt), Muhammad Abbas, Mitchell Hay, Jacob Duffy, Ben Sears, Will O’Rourke
Pakistan: Abdullah Shafique, Imam Ul-Haq, Babar Azam, Mohammad Rizwan (capt), Salman Ali Agha, Tayyab Tahir, Faheem Ashraf, Mohammad Wasim Jr., Naseem Shah, Sufyan Moqim, Akif Javed
Umpires: Chris Brown (NZL), Paul Reiffel (AUS)
TV umpire: Michael Gough (ENG)
Match referee: Jeff Crowe (NZL)
Pakistan says two militants killed in Balochistan amid ongoing separatist violence
- The military says both militants were ‘actively involved in numerous terrorist activities’ in the area
- Shehbaz Sharif applauds the security forces for the operation, vows to eliminate militant violence
KARACHI: Pakistani security forces on Friday killed two militants during an intelligence-based operation in the southwestern Balochistan province, the military said, as the region continues to experience an uptick in separatist attacks.
Balochistan, Pakistan’s largest province by landmass and rich in mineral resources, has faced a low-level insurgency for nearly two decades. Baloch separatist groups accuse the central government of exploiting local resources, such as gold and copper, without benefiting the local population.
Islamabad denies the allegations, saying it is committed to improving the lives of local residents in the province through various development projects.
The Inter-Services Public Relations (ISPR) said in a statement security forces conducted the operation in Kech District on the reported presence of militants.
“During the conduct of operation, own troops effectively engaged the terrorists’ location and after an intense fire exchange, two terrorists were sent to hell,” said the statement.
“The killed terrorists remained actively involved in numerous terrorist activities in the area against the law enforcement agencies as well as the innocent civilians,” it added.
The ISPR said a “sanitization operation” was continuing in the area to eliminate any remaining militants.
It maintained that Pakistani forces were “determined to thwart attempts at sabotaging peace, stability and progress of Balochistan.”
Reacting to the development, Prime Minister Shehbaz Sharif praised the security forces for carrying out the operation.
“The nation is proud of the bravery of our officers and soldiers,” he said in a statement circulated by his office.
“Our war against terrorism will continue until it is completely eradicated from the country,” he added.
Pakistanis hailed for helping rescue children during gas pipeline blast in Malaysia
- Some people jumped into a nearby river to escape the heat and danger of the blast but began to struggle
- Pakistani men visiting the area dived in to help those who were nearly swept away by the current
ISLAMABAD: Pakistani nationals were among the first responders who rescued children from drowning in Malaysia after a gas pipeline explosion in Putra Heights this week, Malaysia’s New Straits Times reported, with witnesses describing their role as swift and selfless.
The rescue took place on Thursday morning after a gas pipeline explosion in the Putra Heights area. As some residents attempted to cross a nearby river to escape the heat and danger from the blast, several individuals, including children, began to struggle in the water.
Pakistani men visiting the area, along with local residents, entered the river to assist those in difficulty.
“We saw that people were calling for help,” said Amir Nawab, 48, one of the Pakistani men involved in the rescue. “When we reached the scene, one of my friends jumped into the river. We saw children struggling in the water and feared they might be swept away by the current.”
Another rescuer, Jaaffar Ali, also from Pakistan, said he acted instinctively when he saw people in distress.
“I saw people who needed help and just acted. I'm thankful they were all saved,” the Malaysian newspaper quoted him as saying.
Similar acts involving Pakistani nationals have been reported in recent months, including during flood rescues in the UAE and an incident in Germany where a Pakistani taxi driver helped save residents from a house fire.
Ahmad Syawal Hassan, a Malaysian resident of Kampung Sri Aman, said he heard the children crying out and was among the first to jump in.
“More people were trying to cross the river at the time. Some had suffered burns. We helped them all get to safety,” he said.
