Saudi Arabia gives financial aid to Pakistan

Saudi Arabia has given $1.5bn to Pakistan to bolster the country’s falling foreign currency reserves and help cement security ties between the two countries, the Financial Times reported. Senior officials at the finance ministry in Islamabad and the central bank in Karachi said that at least half of the funds, which were deposited in March, came as a grant. "The Saudi leadership has given these funds to Pakistan to help the rupee", said one central bank official. "The other half could also eventually become a grant". The injection of Saudi money will lift Pakistan’s liquid foreign reserves about 18 per cent and offer a boost to a struggling economy. The Saudi support to Pakistan follows a mid-February visit by Salman bin Abdul Aziz al-Saud, Saudi crown prince, amid suggestions that Saudi Arabia is seeking an expansion of its security ties with Pakistan. The Saudi assistance may help to support Pakistan’s weak economy though it cannot fund a long-term recovery, economists said.