Islamabad sought Riyadh’s support over alleged human rights violations by India in the territory of Kashmir, Saudi Arabia has pushed Pakistan to repay the loan.
With the $1 billion flowing out, Pakistan – which has $13.3 billion in central bank foreign reserves – could face a balance of payments issue after clearing the next Saudi instalment.
“China has come to our rescue,” a foreign ministry official told Reuters. A finance ministry official said Pakistan’s central bank was already in talks with Chinese commercial banks.
“We’ve sent $1 billion to Saudi Arabia,” he said. Another $1 billion will be repaid to Riyadh next month, he said. Islamabad had returned $1 billion in July.
Although a $1.2 billion surplus in its current account balance and a record $11.77 billion in remittances in the past five months have helped support the Pakistani economy, having to return the Saudi money is still a setback.
Pakistani army chief General Qamar Javed Bajwa, who visited Riyadh in August to ease the tensions, met the Saudi ambassador in Islamabad on Tuesday.
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