Saudi Arabia has rolled over $3 billion in financing for Pakistan, while a proposed $10 billion US liquidity facility remains uncertain. Finance Minister Muhammad Aurangzeb confirmed the extension at Parliament House on Wednesday.
Riyadh provided the funds in April to help Pakistan cover $3.5 billion in repayments to the United Arab Emirates. The facility matured on Oct 31 after a three-month term. “It has been extended and for a reasonable period,” Aurangzeb said. He gave no new maturity date.
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Aurangzeb met Saudi Finance Minister Mohammed Al-Jadaan during the recent World Bank and IMF meetings in Bangkok. Riyadh had already extended a separate $5 billion deposit until 2028, moving it off its annual rollover schedule. Aurangzeb said Pakistan sought no additional Saudi support. Reserves covered more than three months of imports, he said, and Pakistan aims to reach four months by year-end through capital market borrowing.
Pakistan Plans More Bond Issues
Islamabad requested the US Exchange Stabilisation Support Facility in July. Aurangzeb said it would provide additional liquidity if Washington approved it. He pointed to Pakistan’s $3 billion September bond sale, which drew $6 billion in orders, as evidence of market access.
Pakistan plans further Eurobond and Panda bond issues, alongside a rupee-linked bond that would settle in dollars. Aurangzeb met 70 to 80 institutional investors in Bangkok and said five- and 10-year financing offers were available beyond the IMF programme. He also sought US Export-Import Bank and Development Finance Corporation backing for American investors and exporters. He expects the IMF board to consider a $1.2 billion disbursement in December.
Government Targets $4 Billion External Debt Reduction
Aurangzeb told the Senate finance committee that Pakistan aims to cut external debt by $4 billion this fiscal year and $3.5 billion next year, following a $4.5 billion reduction last year. The government plans to replace costly short-term borrowing with longer-term bonds and private placements.
He said external debt rose from $45 billion in FY2015 to around $100 billion, previously climbing by $5 billion to $6 billion annually. Growth slowed to about $1 billion annually over the past two years. He said reserves crossed $21.5 billion and projected a current account deficit of no more than 1% despite oil and wheat imports.
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Finance Secretary Imdadullah Bosal said public debt fell to 68.6% of GDP in June 2026 from 75.1% in FY2023. Annual growth slowed to 7.7%, a 20-year low. Domestic debt fell from Rs68.4 trillion in June to Rs58.8 trillion in August. Foreign debt held at $98.2 billion. Of $11 billion in net financing needs after rollovers and refinancing, Pakistan repaid $5 billion in four months. Another $6 billion falls due over seven months.
Committee chair Saleem Mandviwalla directed the State Bank to review foreign exchange clearance for politically exposed persons and personal appearance rules for lawmakers with valid travel documents. The committee also objected to a deputy director handling the central bank’s Oct 30 response. Mandviwalla warned the committee would revisit the matter if it remained unresolved.
