Saudi Arabia has extended the term of its $3 billion deposit with Pakistan for an additional year, providing a critical boost to the country’s foreign exchange reserves and reinforcing the longstanding economic partnership between the two nations. Government sources confirmed that the deposit, held at the State Bank of Pakistan (SBP), was originally set to mature on December 4 but will now remain available to support Pakistan’s external financial needs.
Pakistan’s total foreign exchange reserves currently stand at $19.6 billion, with $14.56 billion held at the SBP and $5.04 billion in commercial banks. The original $3 billion deposit was provided under a 2021 agreement during a period of severe balance-of-payments pressures and dwindling foreign reserves. By extending the deposit, Saudi Arabia ensures that these funds will continue to assist Pakistan in managing imports, stabilizing the currency, and meeting other external obligations.
A senior official familiar with the matter stated that the extension underscores the strength of bilateral relations and Saudi Arabia’s continued commitment to Pakistan’s economic stability. Economists also view the extension as a timely relief, offering policymakers more flexibility to implement economic reforms and secure additional financing from international partners. The move signals reliability to markets and investors, demonstrating that Pakistan enjoys support from key regional allies even amid ongoing fiscal challenges.
While the deposit extension does not address Pakistan’s structural economic problems, it provides a vital cushion to manage immediate liquidity needs, maintain essential imports, and negotiate with the International Monetary Fund and other lenders. Officials noted that such financial support further strengthens the broader strategic and diplomatic relationship between the two countries, which have historically collaborated on energy, trade, and development projects.
With this extension, Pakistan can continue leveraging its reserves to maintain economic stability while seeking longer-term solutions to balance-of-payments and fiscal challenges.
This development comes at a critical time, helping Pakistan navigate rising debt servicing costs and ongoing economic pressures, while reinforcing the mutual trust and cooperation between Islamabad and Riyadh.
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