Saudi Arabia has once again extended its crucial financial support to Pakistan by rolling over the $3 billion deposit placed with the State Bank of Pakistan (SBP) for an additional year. The SBP confirmed the development on Thursday, stating that the Saudi Fund for Development (SFD), acting on behalf of the Kingdom of Saudi Arabia, agreed to continue the deposit arrangement just days before it was scheduled to mature. This decision marks another chapter in the ongoing financial cooperation between the two countries, highlighting Riyadh’s consistent role in helping Pakistan manage its external financing pressures and stabilize its economy.
According to SBP, the latest extension serves as a continuation of Saudi Arabia’s longstanding commitment to Pakistan’s economic resilience. The central bank noted that the renewed agreement will not only strengthen Pakistan’s foreign exchange reserves but also support the country’s overall economic growth trajectory. The deposit was first placed in 2021, with subsequent rollovers in 2022, 2023, and 2024, making this the fourth extension in a row. This sustained backing underscores the strategic economic relationship that the two nations have maintained over the years, especially during periods of financial stress.
The timing of the extension aligns with Pakistan’s ongoing efforts to maintain reserve buffers amid fluctuating external inflows. Last week, the SBP reported that its own foreign exchange reserves increased slightly by $9 million, reaching $14.560 billion for the week ending November 21. Despite this modest rise, the country’s total liquid foreign reserves declined to $19.605 billion from $19.738 billion in the previous week. The decrease was primarily attributed to a reduction in foreign exchange held by commercial banks, whose reserves fell from $5.186 billion to $5.044 billion during the same period.
The rollover of the Saudi deposit is expected to provide a stabilizing effect as Pakistan continues to navigate external account challenges, global economic uncertainties, and domestic pressure points related to fiscal adjustments and structural reforms. With international financial markets becoming more unpredictable, bilateral financial assistance remains an important pillar for countries like Pakistan that rely on both multilateral and friendly-state support to manage balance-of-payment constraints.
Saudi Arabia’s decision also reflects its broader regional strategy of promoting economic cooperation and fostering stability among partner nations. For Pakistan, the continuation of this deposit not only eases immediate financial stress but also strengthens confidence among international lenders, investors, and rating agencies, all of whom monitor reserve adequacy as a key indicator of macroeconomic health.
As Pakistan’s policymakers work to implement reforms that can support sustainable growth, the renewal of the Saudi deposit brings temporary relief and buying time. Analysts note that while such rollovers help ease short-term pressures, long-term stability will ultimately depend on structural changes that can boost exports, enhance investment, and strengthen domestic revenue. Nonetheless, the extension offers reassurance at a critical time and reflects a partnership that has played a significant role in Pakistan’s financial landscape over the past several years.
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