LAHORE: Saudi Arabia has agreed to extend the maturity of its $3 billion deposit placed with the central bank for another year, offering critical support to Pakistan’s fragile external account, the State Bank of Pakistan (SBP) said on Thursday.
In a statement, SBP said the Saudi Fund for Development (SFD) has rolled over the deposit initially due to mature on December 8 for a further 12 months.
“The extension of the term of the deposit is a continuation of the support provided by the Kingdom of Saudi Arabia to the Islamic Republic of Pakistan, which will help strengthen Pakistan’s foreign exchange reserves and contribute to the country’s economic growth and development,” the SBP noted.
The $3 billion deposit was originally signed in 2021, and later rolled over in 2022, 2023, and 2024, making this the fourth extension.
Last week, the SBP reported that its foreign exchange reserves increased slightly by $9 million, reaching $14.560 billion as of the week ending November 21.
However, Pakistan’s total liquid reserves fell to $19.605 billion, down from $19.738 billion, due to a decline in commercial banks’ foreign currency holdings, which dropped from $5.186 billion to $5.044 billion.
Saudi Arabia has historically been one of Pakistan’s most reliable partners, extending support in the form of oil on deferred payments, guarantees for international lenders including the International Monetary Fund, and recurring deposit rollovers to stabilize Pakistan’s external sector.
With over 2.5 million Pakistani expatriates working in the Kingdom, Saudi Arabia remains Pakistan’s largest source of remittances.
Following a meeting between Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammed bin Salman on the sidelines of the FII9 Conference in Riyadh, the two countries strengthened their strategic cooperation after signing a defense pact.
