Saudi Arabia Strengthens Pakistan's Economy with $3 Billion Deposit and Extended Support

In a significant move to bolster Pakistan's economy, Saudi Arabia has announced a $3 billion deposit and extended its existing $5 billion financial facility for three more years. This support comes at a critical time as Pakistan faces external financing challenges and prepares for substantial debt repayments. Finance Minister Muhammad Aurangzeb confirmed the news during the World Bank IMF Spring Meetings, emphasizing the importance of this backing for enhancing foreign exchange reserves. As Prime Minister Shehbaz Sharif embarks on a diplomatic tour, this financial assistance is expected to play a vital role in stabilizing Pakistan's economy and meeting its international obligations. The government remains committed to maintaining reserves and fulfilling its debt responsibilities.

By Narendra Chaudhary Apr 15, 2026, 16:35 IST

Significant Financial Support for Pakistan

Islamabad: Pakistan's foreign reserves received a significant uplift as Saudi Arabia announced an additional USD 3 billion deposit, alongside an extension of its existing USD 5 billion facility for another three years.

This announcement was made by Pakistan's Finance Minister Muhammad Aurangzeb during a media briefing in Washington, coinciding with the World Bank IMF Spring Meetings 2026.

Aurangzeb clarified that the previously established annual rollover for the USD 5 billion Saudi deposit has been replaced with a longer-term arrangement, as reported by local media.

This financial backing comes at a crucial juncture for Pakistan, as Prime Minister Shehbaz Sharif embarks on an official visit to Saudi Arabia, marking the first stop on his three-nation tour that also includes Qatar and Turkiye from April 15 to 18.

The minister emphasized that this support from Saudi Arabia is vital for addressing Pakistan's external financing requirements, aiding in the bolstering of foreign exchange reserves and enhancing the nation's external account.

This announcement arrives as Islamabad is set to repay USD 3.5 billion to the United Arab Emirates (UAE) this month, a move that could exert pressure on its foreign reserves.

The International Monetary Fund (IMF) has mandated that Pakistan's three primary bilateral creditors—Saudi Arabia, China, and the UAE—must sustain their cash deposits until the current three-year program concludes.

Aurangzeb reiterated the government's commitment to maintaining reserves in accordance with market obligations and IMF targets, aiming to build reserves to approximately USD 18 billion, which would cover around 3.3 months of imports by the fiscal year's end.

He also mentioned that Pakistan had recently repaid USD 1.4 billion in debts, including a Eurobond, assuring that the government is dedicated to fulfilling all upcoming external obligations promptly.

Despite media speculation, Aurangzeb noted that the government had chosen to remain silent until formal communications were established, as clarity is essential before public disclosures.

Islamabad is also progressing with its broader external financing strategy, which includes the newly announced Global Medium-Term Note (GMTN) program and plans for an inaugural Panda Bond issuance.

Additionally, Aurangzeb stated that the country is capable of managing all debt repayments, with reserves currently covering roughly 2.8 months of imports, which is crucial for maintaining macroeconomic stability.

He highlighted ongoing considerations for Eurobonds, Islamic sukuk, and dollar-settled rupee-linked bonds, expressing expectations for Eurobond issuance this year while also exploring commercial loan options.