Finally there is good news for Pakistan. After Saudi Arabia agreed to renew the much needed $3 billion deposit for Pakistan, Islamabad is now expected to receive an additional $2.8 billion from the International Monetary Fund from the kingdom’s quota of Special Drawing Rights (SDRs).

The IMF executive board is also expected to approve the release of $1.2 billion on August 29.

Pakistan based newspaper the News quoted unnamed sources saying that Saudi Arabia, which has traditionally been an ally of Islamabad, is likely to provide another $100 million a month for 10 months in petroleum products. This will be granted as additional support, the sources told the newspaper.

Earlier the IMF wanted Pakistan’s allies to commit to assist Islamabad, which is currently staring at a deepening economic crisis with foreign exchange reserves dropping below the $8 billion level. The annual inflation in July stood at 24.9 per cent — the highest since 2008. In June it was 21.3 per cent.

“The aid comes as the IMF has been looking to assess Saudi Arabia’s commitment to financing Pakistan before the multilateral lender disburses fresh funds to the South Asian nation,” the newspaper said.

Pakistan is now hoping to receive an additional $2.8 billion from the IMF from Saudi Arabia’s quota of Special Drawing Rights (SDRs).

The development has provided the country’s currency rupee a big push. After a steady fall, the currency made a strong recovery in August.

Pakistan’s Prime Minister Shehbaz Sharif during his Independence Day address on August 14 at the Jinnah Convention centre promised to transform the country’s economy.

Earlier, Pakistan’s military chief, General Qamar Javed Bajwa too intervened and sought the US’ support in securing the IMF loan.

Under former Prime Minister Imran Khan, Pakistan’s relations with its allies including the Gulf countries and the US nosedived as he moved closer to China.   

Also read: China rattled as Pakistan moves closer to US