Pakistan Secures $3bn Saudi Deposit Extension Amid Pressure on Foreign Reserves
By Shahzad Paracha :
Pakistan and Saudi Arabia have signed an agreement to extend a $3bn financial deposit, offering temporary relief to Islamabad as it navigates mounting pressure on its external accounts.
The deal, finalised between the Saudi Fund for Development and the State Bank of Pakistan, allows for the rollover of the existing deposit, which had been nearing maturity. Officials say the arrangement will help stabilise Pakistan’s foreign exchange reserves at a time of economic strain.
The agreement was signed by central bank governor Jameel Ahmed and SFD chief Sultan bin Abdulrahman Al-Marshad, in the presence of Finance Minister Muhammad Aurangzeb during meetings held in Washington, DC on the sidelines of the World Bank and IMF Spring gatherings.
Saudi authorities have also pledged an additional $3bn deposit and extended a separate $5bn facility for a further three years, underlining continued financial support for Pakistan as it grapples with external financing challenges.
Officials described the move as a reflection of long-standing economic ties between the two countries, adding that it would contribute to strengthening Pakistan’s balance of payments position.
The support comes as Islamabad faces fresh pressure on its reserves, with plans to repay a $3.5bn loan to the United Arab Emirates this month. The repayment risks narrowing the country’s external buffers and complicating its commitments under the International Monetary Fund programme.
Pakistan’s foreign exchange reserves remain under strain amid rising global oil prices and broader economic uncertainty linked to tensions in the Middle East. Official data shows reserves standing at around $16bn in late March, covering roughly three months of imports.
A recent failure to secure a rollover of the UAE facility has heightened concerns over short-term financing gaps, although authorities insist the country remains on a broader path of economic stabilisation under IMF-backed reforms.
Analysts warn that external financing risks continue to pose a significant challenge, particularly in a volatile global environment where access to capital remains constrained.
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