ISLAMABAD: Pakistan’s economy has received a major boost through fresh financial support from Saudi Arabia. The kingdom agreed to extend a $1 billion oil financing facility during the current fiscal year. The support is part of Riyadh’s ongoing partnership to stabilize Pakistan’s economy.
According to official finance ministry documents, the facility is valued at Rs290 billion. It allows Pakistan to meet essential oil import needs without an immediate cash outflow. Additionally, the support reduces pressure on foreign exchange reserves amid rising global energy prices.
Officials said Pakistan already received more than Rs85 billion worth of oil in the first quarter. That amount is equivalent to $300 million of total support. Moreover, Saudi Arabia is supplying nearly $100 million worth of oil every month. The supply equals about Rs28.37 billion and will continue to help maintain smooth energy flows.
Deposits Strengthen Foreign Reserves
Besides the oil support, Saudi Arabia also rolled over $5 billion in deposits placed with the State Bank of Pakistan. The rollover protects reserves ahead of crucial repayment timelines.
Officials confirmed that $2 billion will mature in December 2025. Meanwhile, the remaining $3 billion will be due in June 2026. The deposits carry a 4% interest rate and renew annually under existing financial arrangements.
Stable Reserves Improve Market Sentiment
Finance ministry officials stated that the deposits equal nearly Rs1,450 billion. They classify the funds as budgetary support loans. Therefore, the inflows contribute to fiscal stability and improve investor confidence.
Analysts say the assistance reflects longstanding cooperation between the two nations. It also supports Pakistan’s ongoing economic recovery efforts and IMF-backed reform program.
