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China immediately agreed to lend £ 1.5 billion to Pakistan to pay off Saudi Arabia’s $ 2 billion debt.
Indian media India Today The information was given on Sunday.
One billion dollars of Saudi Arabia’s two billion dollars will be repaid on Monday, the news report said. The remaining £ 1 billion will be paid out next January.
China does not make this loan to Pakistan from the State Administration of Foreign Exchange or Secure Fund. It is not even granted as a commercial loan.
the Quick On the rostrumWith reference to India Today Under the 2011 Currency Swap Agreement (CSA), China will lend an additional 10 billion yuan (1.5 billion) to Pakistan.
As a result, Pakistan will have to pay a total of 20 billion yuan (সাড়ে 4.5 billion) in trade to China.
CSA What
The State Bank of Pakistan of Pakistan and the People’s Bank of China of China signed the Currency Exchange Agreement (CSA) in December 2011 to increase bilateral trade and direct investment and provide short-term financial assistance.
Later, in 2014, the contract was renewed for three years. At that time, the financial aid limit was 10 billion yuan or 1.5 billion dollars.
In May 2016, the contract was extended for another three years. At that time, the financial aid limit was set at 20 billion yuan or three billion dollars.
According to the rules, the contract is expected to expire next May. However, Pakistan has requested that the agreement be extended for another three years.
Under the agreement, this additional £ 1.5bn debt will not be considered Pakistan’s public debt. This would basically be seen as a commercial advantage for China.
Neither the Ministry of Finance nor the Central Bank have ruled on the matter.
Why does Saudi Arabia have to pay the debt
As a sister country, Saudi Arabia has always provided financial assistance to Pakistan. In recent years, as Saudi Arabia’s friendship with India has grown, the Saudi government has been silent on the Kashmir issue. At the same time, Saudi Arabia favors India’s role in the OIC.
In August 2016, Pakistani Foreign Minister Shah Mehmood Qureshi said that the OIC, an organization of 57 Muslim countries run by Muslims, was not playing an effective role in the Kashmir issue. Call a meeting.
Following Qureshi’s remarks, Pakistan was embroiled in diplomatic bitterness with its longtime ally, Saudi Arabia. According to analysts, the oil-rich Middle East country is beginning to view Qureshi’s remarks as a direct challenge to the Saudi leadership.
The situation turned so bitter that Saudi Arabia immediately cut off financial aid to Pakistan, forcing it to pay off its £ 3 billion debt. In addition, Saudi Arabia cut off 3.2 billion pounds of oil purchases from Pakistan.
Saudi Arabia forced Pakistan to pay £ 1bn of its £ 3bn debt last July.
