Saudi Arabia and Iran Woo Incoming Pakistani Prime Minister | WHAT REALLY HAPPENED


Saudi Arabia and Iran Woo Incoming Pakistani Prime Minister

An offer by a Saudi-backed bank to lend financially strapped Pakistan US$4 billion is likely intended to bolster Saudi influence when former international cricket player Imran Khan is sworn in in the coming week as the South Asian country’s next prime minister.

The offer was most immediately related to a statement by Asad Umar, Pakistan’s new finance minister-in-waiting, that Pakistan would decide on whether to seek a bailout from the International Monetary Fund (IMF) or friendly nations such as China and Saudi Arabia by the end of September.

Pakistan reportedly is looking to possibly ask the IMF for a US$12 billion bailout package. The country’s foreign exchange reserves have plummeted over the past year. Chinese loans have so far kept Pakistan afloat. Pakistan’s currency, the rupee, has been devalued four times since December and lost almost a quarter of its value.

It was unclear whether the loan by the Jeddah-based Islamic Development Bank (IDB) would be in addition to IDB’s activation in late July of a three-year US$4.5-billion oil financing facility for Pakistan intended to stabilize the rupee-dollar exchange rate in the interbank market that has largely remained under pressure. The International Islamic Trade Finance Corporation (ITFC), an IDB subsidiary, at the same time rolled over a loan to Pakistan of $100 million.

Nonetheless, the offer even before Mr. Khan takes office, is also related to Saudi uncertainty over what his rise to power means geopolitically for the kingdom’s bitter rivalry with Iran, Pakistan’s neighbour.

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