Saudi Arabia Announces $3bn Fresh Deposit, Extends $5bn Financial Facility for Pakistan
WASHINGTON, DC: Saudi Arabia has pledged a fresh $3 billion deposit for Pakistan and extended its existing $5 billion financial facility until 2028, Finance Minister Muhammad Aurangzeb announced on the sidelines of the World Bank–IMF Spring Meetings 2026.
The announcement comes at a critical juncture for Pakistan’s economy, as the country faces mounting external financing pressures, including the repayment of a $3.5 billion loan to the UAE later this month.
Aurangzeb said the Saudi support would play a vital role in strengthening Pakistan’s foreign exchange reserves and stabilizing its external account.
Strengthening External Stability
According to the finance minister, the extension of the $5 billion deposit marks a shift away from the previous annual rollover arrangement to a longer-term commitment, offering greater financial predictability.
He emphasized that the additional $3 billion deposit would help Pakistan meet its obligations under the International Monetary Fund (IMF) programme, including a target to raise foreign exchange reserves to approximately $18 billion by the end of the fiscal year — equivalent to around 3.3 months of import cover.
“The support comes at a critical time and will reinforce reserves while strengthening the external account,” Aurangzeb stated.
Managing Debt and Financing Needs
Pakistan recently repaid $1.4 billion in external debt, including a Eurobond, which Aurangzeb described as a “non-event,” highlighting the government’s ability to manage repayments smoothly.
He reiterated that the country’s external financing strategy is clearly defined and being implemented in a disciplined manner, with a focus on meeting all upcoming maturities on time.
The minister also revealed that Islamabad is advancing its broader financing plans, including:
- Launching a Global Medium-Term Note (GMTN) programme
- Issuing its first Panda Bond
- Exploring Eurobonds, Islamic sukuk, and commercial loans
High-Level Engagement with Saudi Leadership
Aurangzeb disclosed that the financial package followed detailed discussions with Saudi Finance Minister Mohammed bin Abdullah Al Jadaan during a recent meeting in Islamabad.
He expressed gratitude to Saudi leadership, particularly Crown Prince Mohammed bin Salman, for their continued support and cooperation in helping Pakistan navigate economic challenges.
Boost to Confidence and Global Standing
The finance minister noted that Pakistan is receiving positive feedback from international institutions, including the World Bank and IMF, as well as global investors.
He added that Pakistan’s recent diplomatic role in facilitating dialogue between rival nations had further enhanced its global standing and contributed to improved investor sentiment.
Outlook
Aurangzeb reaffirmed the government’s commitment to:
- Maintaining macroeconomic stability
- Meeting all external obligations
- Continuing structural reforms
- Strengthening partnerships with global financial institutions
He added that maintaining foreign reserves at sustainable levels — currently around 2.8 months of import cover — remains a key priority moving forward.
