ISLAMABAD – Saudi Arabia has agreed to roll over $5 billion in loans provided to Pakistan for three years, a move expected to reduce immediate pressure on the country’s external payments, according to the State Bank of Pakistan (SBP).
The central bank said the rollover of the Saudi deposits would provide relief to Pakistan’s short-term financial obligations and strengthen its external account position. Pakistan currently holds $8 billion in deposits from Saudi Arabia, including $3 billion received in April this year.
The SBP stated that the country’s external financing requirements have declined to around $21.5 billion for the current period. The reduction comes amid lower debt servicing costs, with interest payments on foreign loans falling by approximately $500 million.
Pakistan has already repaid around $2.2 billion in external debt during July, while refinancing of a $1.3 billion commercial loan from China is expected next month, according to the central bank.
The SBP also reported that it purchased $9 billion from the open market during the last fiscal year as part of efforts to strengthen foreign exchange reserves.
Pakistan has set a target of increasing its foreign exchange reserves to $20.2 billion by December 2026. Officials expect continued support from financial arrangements and improved external account management to help achieve the reserve goal.
The extension of Saudi financial support is being viewed as a significant step toward maintaining stability in Pakistan’s balance of payments and managing upcoming external financing needs.
