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Pakistan's president to ask Saudi leadership to defer oil payments

Other News Materials 4 November 2008 12:04 (UTC +04:00)

Pakistani President Asif Ali Zardari will request the Saudi leadership to defer payments on oil exports for the next two years to help his country avert a balance of payment crisis when he arrives in the kingdom on an official visit on Tuesday, his spokesman said.

"The president will discuss several regional and bilateral issues, including means to strengthen the bilateral relations and ways to tackle the menace of terrorism and extremism when he meets King Abdullah," spokesman Farhatullah Babar said, reported dpa.

He will also seek economic assistance, including in the form of exporting oil to Pakistan on deferred payments, Babar added.

Pakistan is currently facing a tightening balance of payments and is desperately looking for a much needed 5 billion dollars to avoid an economic meltdown.

The country's financial woes were caused mainly by last year's political crisis and dozens of suicide attacks by Taliban militants that drove away foreign investors, dropping foreign reserves some 75 per cent over the last 12 months from 18 billion dollars to around 4.3 billion dollars.

At the same time, the rupee has weakened by more than 27 per cent against the dollar and the inflation stands at more than 30 per cent. Deferred oil payments of 3 billion to 3.5 billion dollars, if approved, will be of great help to the economically sinking country.

Saudi Arabia is a member of the recently formed the Friends of Pakistan group, which is to hold a crucial meeting on November 16 in Abu Dhabi to discuss how to provide financial help to Pakistan.

Along with other members - the European Union, the United States and China - the group will explore finding ways to avoid further destabilization in a key ally in the fight against terrorism.

Pakistan is also negotiating an economic bailout programme with the International Monetary Fund.

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