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Pakistan secures $ 6B Saudi loan under Khashoggi murders of outrage



Riad says insider critic Khashoggi had died in a fistfight with Saudi officials while Turkey says he was killed in a premeditated murder.

Saudi Arabia has agreed to grant Islamabad $ 3 billion in foreign currency for one year, another loan worth up to $ 3 billion for staggered oil import payments

"This agreement will apply for three years after that, "the Pakistani Foreign Ministry said in a statement.

"We are desperate"

The deal comes after Khan's earlier visit to Riyadh, whose first trip abroad since taking office in July did not produce any significant results. Prior to attending the conference, Khan said that Pakistan, facing an acute balance of payments crisis, was "desperate" for Saudi loans to shore up the economy.

"If we do not get loans from friendly countries or from the IMF We will not have enough foreign currency to service our debt or pay our imports in two or three months, so we're desperate right now," Khan said allegedly Middle East Eye.

Pakistan's Finance Minister, Asad Umar, recently said the country may need more than $ 1
2 billion to plug its finances as the current account deficit worsens and foreign exchange reserves plummet.
Pakistan has devalued its currency several times since December and reserves have dropped to $ 8.1 billion Bloomberg

This month, Umar sought talks with the IMF to discuss Pakistan's second bailout within five years, though he said it is the last of the country.

Plaudits and Criticism

Khan was faced with domestic criticism for visiting Saudi Arabia's so-called "Davos in the Desert," but Riyadh's promise of financial support larger than expected by analysts, also brought him recognition.

The daily columnist Ayesha Ijaz Khan asked if Saudi Arabia would expect Khan to put aside his version of the events against Turkey, another important ally of Islamabad, in the Khashoggi case.

"These are important issues to be resolved, as there is no free lunch in this world," she said. Other critics asked whether the Sunni kingdom now expects Pakistani support for its controversial Yemeni war against Shia Houthi groups.

Islamabad has so far resisted such a move because he feared it would aggravate anger with the neighboring Shiite-dominated Iran supporting the Houthi and the Sunni-Shiite tensions within Pakistan.

However, some analysts said the benefits of

"For Islamabad, the look is to seek financial support from a Saudi regime, with fresh blood on their hands and a blurred poor image," says Michael Kugelman, South Asia expert US Wilson Center, said CNN.

But he added that, in terms of Pakistan's interests, securing the aid "qualified as an unvarnished success".

"Islamabad has secured much-needed money that only a few states wanted to provide," he said.

Mosharraf Zaidi, columnist and political analyst, said the deal must be seen in the context of Pakistan to manage complex regional dynamics "and an insatiable hungry youth economy."

"This is a good start, but it only buys oxygen," he added. "The real test is a reform."

Analysts say the Saudi loans will also reduce the IMF's bailout package and strengthen Pakistan's negotiating position with the fund.

The administration of US President Donald Trump has signaled great reservations about the IMF, which grants Pakistan another rescue package since Islamabad is spending billions of dollars on the China-Pakistan Economic Corridor (CPEC), a billion-dollar series of China-funded infrastructure projects , accepts.

"(Pakistan) can now also petition for a slightly lower sum from the IMF, which in turn would reduce some of the political risks stemming from the Fund's venture, a move that never does well in Pakistani opinion," said Kugelman.


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