Saudi Arabia’s extension of a $5 billion financial deposit for another three years has provided Pakistan with a significant boost on the external financial front. Economists say the move comes at a time when the government is trying to ease external payment pressures, stabilise foreign exchange reserves and push ahead with economic reforms.
According to the State Bank of Pakistan, the decision will postpone the need for a large financial payment in the short term, allowing the government to use its financial resources more effectively. The central bank says the extension will facilitate the external payment schedule and strengthen financial stability.
According to official data, Pakistan currently has $8 billion in Saudi deposits, of which $3 billion was added in April this year. Experts say the financial support is a sign of strong economic partnership and mutual trust between the two countries.
The State Bank also said that Pakistan’s external financing needs for the current fiscal year have been reduced to $21.5 billion, while interest payments on external debt have also been reduced by about half a billion dollars. According to economic analysts, this could help the government maintain fiscal discipline.
On the other hand, Pakistan has repaid $2.2 billion in external debt during July, while refinancing of $1.3 billion in commercial debt from China is expected next month, which could further support external financial arrangements.
According to the central bank, $9 billion was purchased from the open market last year, while a target has been set to increase foreign exchange reserves to $20.2 billion by December 2026. Experts say that strong reserves are not only important for import payments but also increase the confidence of global financial institutions and investors.
According to economic experts, the extension of the financial support period by Saudi Arabia is not just a debt rescheduling but also a positive sign for Pakistan’s financial credibility. According to them, if the government maintains its focus on economic reforms, increasing exports and fiscal discipline, such international support can further stabilise the country’s economy.
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