Pakistan gets one-year extension of $3billion Saudi deposit

KARACHI – Saudi Arabia has agreed to extend a $3 billion deposit currently parked in the State Bank of Pakistan (SBP) for one more year in order to help the South Asian country tackle prevailing economic crisis.

In 2021, the Saudi Fund for Development had deposited $3 billion in Pakistan's foreign reserves for one year at 4% interest under a support package.

SBP announced the development about one-year extension on Twitter as the deposit was set to mature on December 5, 2022.

“Saudi Fund for Development (SFD) has confirmed rollover of $3bn deposit maturing on 5Dec22 for one year. Deposit is placed with SBP and is part of its forex reserves,” the central bank announced.

Saudi Fund for Development (SFD) has confirmed rollover of $3bn deposit maturing on 5Dec22 for one year. Deposit is placed with SBP and is part of its forex reserves. This reflects continuing strong and special relationship between KSA and Pakistan. Old PR https://t.co/YvQ9VXPq0x

— SBP (@StateBank_Pak) September 18, 2022

SBP said that the agreement reflects continuing strong and special relationship between KSA and Pakistan.

Experts are of the view that the $3billion deposit will provide a breathing room to the under-pressure economy and boost confidence of investors and it would end the speculations that Pakistan would default on its international loan obligations.