China and Saudi assure US$13 billion funding to Pakistan: Dawn newspaper

A camp, in Sehwan, Pakistan, for people internally displaced by floods. PHOTO: REUTERS

ISLAMABAD – China and Saudi Arabia have assured US$13 billion in funding to Pakistan as the cash-strapped nation grapples with the aftermath of catastrophic floods, Dawn newspaper reported.

Following the country’s Prime Minister Shehbaz Sharif’s recent visit to Beijing, China has agreed to roll over US$4 billion worth of sovereign loans to the South Asian nation, refinance another US$3.3 billion in commercial bank borrowings and increase currency swap facility by as much as US$1.45 billion, the newspaper reported citing Pakistan’s Finance Minister Ishaq Dar.

The country is among a host of emerging- and frontier-market nations struggling to service heavy debt as their currency weakens against the US dollar and borrowing costs rise. Its predicament has been worsened by climate change exacerbated flooding that led Moody’s Investors Service to downgrade the nation deeper into junk.

Saudi Arabia has also “given a positive response” to Pakistan’s request for an additional US$3 billion in funding and doubling of its deferred oil facility to $1.2 billion, Dar told journalists, according to the report. BLOOMBERG

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