Pakistan pays back Saudi loan with Chinese funds

Islamabad has so far paid $2 billion to Riyadh after Saudi Arabia insisted on the repayment of the loan earlier this year in the wake of bilateral ties being strained over Pakistan’s efforts to forge an alternative front of Muslim nations through an outreach to Turkey and Malaysia.

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Pakistan has been paying back a $3-billion loan extended by Saudi Arabia in 2018 using emergency financial assistance from China against the backdrop of strained ties between Islamabad and Riyadh, people familiar with developments said on Tuesday.

Islamabad has so far paid $2 billion to Riyadh after Saudi Arabia insisted on the repayment of the loan earlier this year in the wake of bilateral ties being strained over Pakistan’s efforts to forge an alternative front of Muslim nations through an outreach to Turkey and Malaysia.The people cited above said on condition of anonymity that Pakistan plans to repay the remaining $1 billion by early next year.

Earlier this month, China bailed out Pakistan by enhancing the size of a 2011 bilateral currency swap agreement by 10 billion yuan or about $1.5 billion, The Express Tribune newspaper had reported, citing sources in the finance ministry and the State Bank of Pakistan. This assistance was used to repay the Saudi loan.

 

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