The development came in the backdrop of Pakistan attempts to hold a meeting of foreign ministers in OIC (Organisation of Islamic Corporation) on Kashmr but source confirmed that Saudi Arabia had shown reluctance to accept Islamabad’s request for an immediate meeting of OIC foreign ministers’ on Kashmir.
According to The Express Tribune report, Pakistan has given back Saudi Arabia USD 1 billion out of a USD 3 billion loan that it secured one and a half year ago to avoid default on international debt obligations after the kingdom decided to reduce its financial support.
China, has immediately come forward and extended $1 billion in loan to help Islamabad avoid any adverse impact of the partial withdrawal of the Saudi lifeline, sources in the Ministry of Finance and the State Bank of Pakistan (SBP) told The Express Tribune on Wednesday.
In October 2018, Saudi Arabia approved a loan of USD 6.2 billion to Pakistan for three years, includes USD 3 billion cash on 3.2 percent interest and USD 3.2 billion worth of annual oil and gas supply on deferred payments.
Under the leadership of Prime Minister Imran Khan, the Pakistani government has added nearly USD 22 billion loan, that is 35 per cent to the nation’s international debt pile in the last two years. It includes borrowings from Saudi Arabia, the United Arab Emirates, Qatar, China and from the International Monetary Fund (IMF) and Asian Development Bank (ADB).
The International Monetary Fund (IMF) report stated that “Saudi Arabia also refinanced $3-billion BOP (balance of payments) support loans that matured in November (2019)-January (2020).”
“However, the repayment of $1-billion loan within six months of its renewal was surprising.” The Express Tribune written.
Though it isn’t clear that, whether Saudi Arabia forced Pakistan to pay back USD 1 Billion loan or Pakistan itself decided to pay back after borrowing from China.
Meanwhile, another report coming out from The Express Tribune stated that, Pakistan is in talks with China to swap the remaining $2 Billion debt from Saidi with a new Chinese loan facility
Also Pak-Saudi deferred oil payment agreement has expired & not renewed by Saudi since May 2020 despite secret diplomacy with Saudi Arabia royals
According to these reports, it seems like Pakistan is loosing its Islamic friends.