Featured Pakistan may return $2b Saudi Arabian loan

[alibaz]

Isn't interest haram as per Islam?

Yes and its unfortunate that we are involved into interest in its true manifestation which was the reason for declaring it as haram.

 

[Tameem]

Its horrible to see friends becoming foes in this inept govt.
KSA/GCC, China, USA all going Reds.
IK and Establishment to blame for all this mess.
How long they will continue like this...they need to accept Defeat honorably.
Otherwise public will hang them with the lamppost by their own hands.

 

[TheDarkKnight]

Its horrible to see friends becoming foes in this inept govt.
KSA/GCC, China, USA all going Reds.
IK and Establishment to blame for all this mess.
How long they will continue like this...they need to accept Defeat honorably.
Otherwise public will hang them with the lamppost by their own hands.

You forgot to add MNS friend India as well to the list.
Come out of the fake reality created by your party narrative managers - where Obama, MBS, Trump, Xi Jingpin, Putin are all in unison pleading Bajwa and IK to let their dear friend Nawaz Sharif return as PM for the survival of this world; where Bajwa and Faiz Hameed are sobbing all night and kissing NS’s hand for his forgiveness, but NS has set so and so conditions before any question of forgiveness etc.
The fact is:
- US relations are back to normal now and with Biden it will get more respectable.
- CPEC is still continuing and Chinese relations are never personality specific - even an illiterate person if Pakistan knows this.
- KSA GCC - say what ever you want, Pakistan utilized billions of dollars loan facilities for past two years from these friends. This was unprecedented. Current dip may have to do with Turkey and Israel recognition.

 

[R Wing]

The current account is in surplus and there are no major imports in recent times due to the COVID situation also USD inflow is positive due to record remittances.

State bank should do a major open market operation and buy as many USD from the open market as it can and hopefully 1 billion won't be much of an issue. It will drive the USD exchange rate upwards in short term but it's better than taking more loans.

I believe most of the surplus is debt.

 

[Patriot forever]

I believe most of the surplus is debt.

Surplus is never debt, foreign exchange reserve is mostly but the current small increases are due to surplus.
We have always relied on rotating our loans and never paid from our own pockets, we can not unless our surplus exceeds the loan repayment and interest.
Right now the macroeconomic outlook is positive because we are no longer dependent on loans to run our country (current account deficit), if we continue on this path the next milestone will be to pay interest from our own pockets than comes the principal amount than comes the stable reserves built on our own earnings.

It is a natural process nothing out of ordinary, we are obliged to pay around 10billion+ in this fiscal year.

Its horrible to see friends becoming foes in this inept govt.
KSA/GCC, China, USA all going Reds.
IK and Establishment to blame for all this mess.
How long they will continue like this...they need to accept Defeat honorably.
Otherwise public will hang them with the lamppost by their own hands.

I do not know how much one can lie to support his political affiliation. They are not asking for it out of the blue, it was due according to the terms of agreement and is well accounted for already.
Neither is this payment going to affect the overall macroeconomic outlook by a great deal. We have already made payments in billions against maturing loans this fiscal year.

 

[Invicta]

Surplus is never debt, foreign exchange reserve is mostly but the current small increases are due to surplus.
We have always relied on rotating our loans and never paid from our own pockets, we can not unless our surplus exceeds the loan repayment and interest.
Right now the macroeconomic outlook is positive because we are no longer dependent on loans to run our country (current account deficit), if we continue on this path the next milestone will be to pay interest from our own pockets than comes the principal amount than comes the stable reserves built on our own earnings.

It is a natural process nothing out of ordinary, we are obliged to pay around 10billion+ in this fiscal year.


I do not know how much one can lie to support his political affiliation. They are not asking for it out of the blue, it was due according to the terms of agreement and is well accounted for already.
Neither is this payment going to affect the overall macroeconomic outlook by a great deal. We have already made payments in billions against maturing loans this fiscal year.

Slow and steady wins the race, Pakistan needs to be patient the direction is right - the fear is that Nawaz or Bhuto gang if returned to power will undo any progress in a matter of seconds. Somehow they need to be kept away from government. Pakistan needs another 5-10 years of this leadership.

PTI is not faultless (but who isn't) they are the best party to lead right now and might be able to change the political and economical landscape for good. Pakistan is always one step away from unlocking its full potential, I hope this time it takes that step.

 

[PradoTLC]

Isn't interest haram as per Islam?

Yes.

 

[RealNapster]

Stop treading on two boats. Imran khan should just make foreign policy change

Bro foreign policy is all about treading water on multiple boats at same time

 

[SuvarnaTeja]

Yes and its unfortunate that we are involved into interest in its true manifestation which was the reason for declaring it as haram.

Yes.

I can understand interest being used between Pakistan and China as China is not an Islamic country but I was surprised that interest was being used between Pakistan and Saudi Arabia.

Being major leaders of Islamic world, Pakistan and Saudi Arabia should look at ways how you could avoid using interest.

You should set an example for other Islamic nations could emulate.

 

[R Wing]

Surplus is never debt, foreign exchange reserve is mostly but the current small increases are due to surplus.
We have always relied on rotating our loans and never paid from our own pockets, we can not unless our surplus exceeds the loan repayment and interest.
Right now the macroeconomic outlook is positive because we are no longer dependent on loans to run our country (current account deficit), if we continue on this path the next milestone will be to pay interest from our own pockets than comes the principal amount than comes the stable reserves built on our own earnings.

It is a natural process nothing out of ordinary, we are obliged to pay around 10billion+ in this fiscal year.


I do not know how much one can lie to support his political affiliation. They are not asking for it out of the blue, it was due according to the terms of agreement and is well accounted for already.
Neither is this payment going to affect the overall macroeconomic outlook by a great deal. We have already made payments in billions against maturing loans this fiscal year.

Thanks for the clarification and I really hope you're right.

Are we in a position to pay back the IMF and KSA and still have a surplus? I suppose Chinese loans can remain / rotate because CPEC is long term.

The only two aspects that can potentially revamp the economy and bring a lot of foreign reserves are:
a.) Increasing exports --- textile/agri/tech (forget the rest)
b.) Increase tourism --- PRESERVE the little heritage we have left

The garments, fruit/veg (not sure) and IT sectors can increase exports by an order of magnitude.

 

[Patriot forever]

Thanks for the clarification and I really hope you're right.

Are we in a position to pay back the IMF and KSA and still have a surplus? I suppose Chinese loans can remain / rotate because CPEC is long term.

The only two aspects that can potentially revamp the economy and bring a lot of foreign reserves are:
a.) Increasing exports --- textile/agri/tech (forget the rest)
b.) Increase tourism --- PRESERVE the little heritage we have left

The garments, fruit/veg (not sure) and IT sectors can increase exports by an order of magnitude.

Primary surplus is basically gap between spending and earning (basically no new loans are needed to run the country e.g. to cover the -ve trade deficit + remittances and few other factors).
Loans have always been rotated , and interest is paid by acquiring new loans. This is a classic debt trap, we will be able to at least slow down this cycle if for start we can cover the interest payment from our own surplus.

This year we will further reduce the CAD but it will still be negative (hopefully I am wrong). It will take sustained 5-6 years of efforts to overcome this debt trap and start to reduce our external debt.

 

[Enigma SIG]

Its horrible to see friends becoming foes in this inept govt.
KSA/GCC, China, USA all going Reds.
IK and Establishment to blame for all this mess.
How long they will continue like this...they need to accept Defeat honorably.
Otherwise public will hang them with the lamppost by their own hands.

Considering that the awam is still licking the balls of NS after 30 years of indentured servitude, I doubt they'll hang anyone by the lampposts.

 

[Morpheus]

Rollover Facility For Saudi Loans Still Available: Hammad Azhar

Posted 20 mins ago by Syeda Masooma

Recently, news reports highlighted that Pakistan was seeking to rollover the $4 billion in loans that it obtained from the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) to avoid depleting the foreign exchange reserves.

By November 1, 2020, the mainstream media was rife with the news that Saudi Arabia might refuse to extend the facility to Pakistan, which would have either resulted in another loan from China or extra pressures on the country’s foreign reserves through commercial loans.


However, on November 11 (today), the Federal Minister for Industries and Production, Hammad Azhar, answering a question from ProPakistani, informed that Pakistan still has the rollover facility and all the news reports stating otherwise are false.
He said,

Pakistan still has the rollover facility as was decided under the IMF program. There is a decided schedule for the repayments of such loans, and Pakistan will follow the schedule as it is meant to.

The Federal Minister did not clarify whether Pakistan will be given a cushion of one year to repay the Saudi loan or that Pakistan is not seeking to extend the repayment in the first place. However, from the discussion that followed, it can be gathered that the course of action with regards to the repayment of the loan to Saudi Arabia will be according to the government’s pre-planned policy.

This also implies that irrespective of the timing of the repayment, the foreign reserves of the country will not be adversely impacted – at least not directly as a result of this payment.
The Minister said,

In the past few days, we have seen a completely ridiculous interpretation of the foreign reserves numbers that the State Bank shared. You cannot simply attribute the reserves amounts to the borrowed loans, rather the number that the SBP shared is a sum of all the inflows and outflows that have taken place within a given time frame.

He also commended the actions of the incumbent government and the central bank that have led to a recovery in the foreign exchange reserves.

The loan in concern refers to three loan deposits, worth $1 billion each, that Saudi Arabia provided in November 2019, December 2019, and January 2020. Of these, $1 billion has already been repaid by Pakistan.

The UAE also loaned Pakistan $2 billion in January and February 2020, which will be maturing early next year. The loans in question will be due for repayment from November 2020 to February 2021.
As of October 23, 2020, the foreign exchange reserves of the State Bank of Pakistan (SBP) stood at $12.121 billion with a significant proportion consisting of foreign loans. Pakistan has received the Extended Fund Facility (EFF) for $6 billion from the IMF, which includes the provision of rolling-over for the aforementioned loans.

Rollover Facility For Saudi Loans Still Available: Hammad Azhar

Recently, news reports highlighted that Pakistan was seeking to rollover the $4 billion in loans that it obtained from the

propakistani.pk

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Fake news in media about not getting a rollover facility. And like clockwork, gangus like op just post news.