Key Points
- Deposit extended until 2029
- Supports Pakistan’s foreign exchange reserves
- Signals confidence in economic reforms
ISLAMABAD: Saudi Arabia has extended its $5 billion financial support for Pakistan until 2029, providing a major boost to the country’s external financing position, State Bank of Pakistan (SBP) Governor Jameel Ahmad said.
The central bank chief said the extension marks a departure from the previous practice of annual renewals, providing Pakistan with sustainability and visibility into its reserve position through 2029.
The announcement comes as Pakistan continues to pursue economic reforms under an International Monetary Fund (IMF) programme aimed at strengthening macroeconomic stability and reducing vulnerabilities in the external account.
Saudi Arabia has remained one of Pakistan’s most important economic partners, repeatedly extending deposit facilities with the SBP during periods of financial stress. The latest rollover is expected to help Islamabad manage its external financing requirements and improve investor confidence.
Pakistan has relied on support from friendly nations, including Saudi Arabia, China, and the United Arab Emirates, as well as multilateral lenders, to bolster its foreign exchange reserves in recent years.
Analysts said the decision to extend the facility for three years reflects Riyadh’s confidence in Pakistan’s improving economic outlook. The country has recorded a moderation in inflation, rising remittance inflows and a gradual recovery in foreign exchange reserves over the past year.
The Kingdom has also pledged billions of dollars in investments across Pakistan’s energy, mining and infrastructure sectors as both countries seek to deepen their longstanding strategic partnership.
Saudi financial assistance has been a recurring feature of Pakistan’s economic landscape for decades, with the two countries maintaining close ties in trade, investment and security cooperation.
The three-year extension removes uncertainty associated with annual rollovers and is expected to provide policymakers with additional space to continue structural reforms aimed at achieving sustainable and inclusive economic growth.
