Pakistan and Saudi Arabia signed a fresh agreement on Friday. It extends a $3 billion deposit that the Saudi Fund for Development placed with the State Bank of Pakistan. Finance Minister Muhammad Aurangzeb witnessed the ceremony in Washington, DC. This took place on the sidelines of the World Bank-IMF Spring Meetings. The move strengthens Pakistan’s foreign exchange buffers at a critical time. The country faces repayment pressure on other loans.
Strong Partnership Boosts External Sector Stability
State Bank Governor Jameel Ahmed and SFD Chief Executive Officer Sultan bin Abdulrahman Al-Marshad put pen to paper on the extension. The Ministry of Finance described the step as a clear sign of the deep and longstanding economic ties between the two countries. Moreover, the deposit helps keep Pakistan’s external accounts steady. This happens while global oil prices stay high and tensions in the Middle East create extra uncertainty.
Saudi Arabia had already pledged an additional $3 billion deposit earlier this week. It also rolled over its existing $5 billion facility for another three years until 2028. Officials say these combined measures give Islamabad much-needed breathing room. This comes as it prepares to repay a separate $3.5 billion loan to the UAE this month.
Pakistan’s foreign exchange reserves currently stand at $16.4 billion. This is enough to cover about three months of imports. Still, analysts warn that any delay in friendly financing could test the country’s ability to meet IMF programme targets. The latest Saudi support arrives just when external financing risks feel most pressing.
Finance Minister Aurangzeb called the agreement another milestone in bilateral cooperation. He thanked Riyadh for its consistent help. Pakistani officials now hope the extended deposit will ease pressure on the rupee. It will help keep the economy on a stable path through the rest of the year.
