KARACHI: Saudi Arabia has committed $3 billion in additional financial support to Pakistan and agreed to extend an existing $5 billion deposit, Finance Minister Muhammad Aurangzeb said on Tuesday, offering a boost to Islamabad’s external financing position.
The announcement comes as Pakistan works to stabilize its foreign exchange reserves and meet external obligations under a loan program backed by the International Monetary Fund (IMF).
Media reports indicated earlier this month that Pakistan would be repaying about $3.5 billion to the United Arab Emirates, funds that had been deposited in the central bank of the South Asian country to shore up foreign exchange reserves during a period of financial strain.
Pakistan described the repayment as a “routine financial transaction,” saying the deposits had matured and were being returned under agreed terms.
“This support comes at a critical time for Pakistan’s external financing needs and would help reinforce foreign exchange reserves and strengthen the country’s external account,” Aurangzeb said while addressing the media in Washington, D.C., on the sidelines of the World Bank–IMF Spring Meetings, according to the finance ministry.
He said the additional Saudi deposits were expected to be disbursed in the coming week, while the existing $5 billion facility would no longer be subject to annual rollover and instead be extended for a longer period.
The minister said Pakistan remained committed to maintaining reserves in line with market expectations and IMF program targets, including a goal of around $18 billion in reserves by the end of the current fiscal year in June.
He also pointed to Pakistan’s recent repayment of a $1.4 billion Eurobond, describing it as a “non-event,” and reaffirmed the government’s commitment to meeting all upcoming external obligations on time.
Aurangzeb said he had held detailed discussions with Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan in Washington and earlier in Islamabad, but noted the government had refrained from commenting publicly before the announcement.
He said authorities had avoided responding to media speculation in the absence of formal communication, emphasizing that such matters required clarity and mutual understanding before being disclosed.
Pakistan has sought to diversify its external financing sources, including plans to raise funds through international markets, as it navigates a challenging economic environment and works to strengthen investor confidence.
