Saudi Arabia: The Saudi Fund for Development on Thursday announced it had signed a deal with Pakistan’s economic affairs ministry to finance oil derivatives amounting to $1 billion for the South Asian country.

Pakistan has been facing a tough economic situation amid dwindling forex reserves and rapidly depreciating national currency.

The country’s credit ratings were downgraded by international agencies as concerns mounted it could default on its financial obligations.

“Following directives from King Salman bin Abdulaziz Al Saud & [His Royal Highness] Mohammed bin Salman, #SFD CEO Mr. Sultan Al-Marshad, signed an agreement with Pakistan’s

Secretary Ministry of Economic Affairs, Dr. Kazim Niaz, to finance oil derivatives worth USD 1 Billion to #Pakistan,” the Saudi agency announced in a Twitter post.

Oil derivatives are financial instruments that use energy products, such as crude oil, as underlying assets. They can be traded by to access their value used as the basis of the contract.

“The agreement aims to support the economy of #Pakistan, enhance sector growth, navigate economic challenges, and build a sustainable economy,” the SFD added. “It comes as a continuation of the support provided previously in 2019 by Saudi to finance oil derivatives with a total of USD 4.4 billion.”

Pakistani Prime Minister Shehbaz Sharif received the SFD delegation, headed by CEO Al-Marshad, in Islamabad on Thursday, where they reviewed the fund’s development projects and programs in Pakistan, and discussed ways to enhance development cooperation between the two sides.

The prime minister said he valued the development efforts provided by the Kingdom, through the SFD, to support his country.

Al-Marshad stressed that these development projects emanate from the keenness of the Saudi leadership to support the development cooperation between the two sides.