Saudi Arabia has pledged an additional $3 billion in financial support for Pakistan and extended an existing $5 billion deposit facility through 2028, providing a significant boost to the country’s external financing position at a critical time.
Finance Minister Muhammad Aurangzeb announced the development during a media briefing in Washington on the sidelines of the World Bank and IMF Spring Meetings, highlighting the importance of continued support from Riyadh in stabilising Pakistan’s economy.
The fresh commitment comes as Pakistan faces mounting pressure on its foreign exchange reserves, including the need to repay a $3.5 billion loan to the United Arab Emirates this month, raising concerns over reserve adequacy and compliance with International Monetary Fund targets.
Boost to reserves amid financing pressures
Aurangzeb said the Saudi support would come at a “critical time” for Pakistan’s external financing needs and would help “reinforce foreign exchange reserves and strengthen the country’s external account.”
He added that the previously existing $5 billion Saudi deposit would now be extended beyond the earlier annual rollover arrangement, offering longer-term stability to Pakistan’s financial position.
Analysts say such deposits, typically placed with the State Bank of Pakistan, play a key role in supporting the country’s balance of payments and maintaining confidence in the currency.
The additional $3 billion commitment further underscores Saudi Arabia’s continued financial backing, which has historically included deposits, oil facilities and direct investments aimed at supporting Pakistan’s economy.
IMF targets and economic outlook
Pakistan is currently working under an IMF-supported programme that requires maintaining adequate foreign exchange reserves and implementing fiscal reforms. The government has set a target of building reserves to around $18 billion by the end of the fiscal year, equivalent to roughly 3.3 months of import cover.
Officials say the Saudi financial package will help Islamabad meet its external financing requirements and avoid disruptions in its reform programme.
The move also comes as global economic uncertainty and regional tensions continue to impact energy prices and capital flows, increasing the need for stable financial inflows.
In recent years, Saudi Arabia has repeatedly extended deposits and financial facilities for Pakistan, reflecting close economic ties between the two countries. These arrangements have often been crucial in helping Pakistan manage short-term liquidity challenges and maintain macroeconomic stability.
While the latest commitment provides immediate relief, economists caution that structural reforms, export growth and fiscal discipline remain essential for long-term economic sustainability.
The extension of the $5 billion facility through 2028 signals a longer-term commitment from Riyadh, offering Pakistan a degree of financial certainty as it navigates ongoing economic challenges.
