Saudi Arabia has extended a $5 billion financial facility for Pakistan until December 2028, easing the country's external financing pressure as Islamabad continues economic reforms under an International Monetary Fund (IMF) programme.
Saudi Arabia now holds $8 billion in deposits with Pakistan after providing an additional $3 billion earlier this year, reaffirming its role as one of Islamabad's key financial partners.
State Bank of Pakistan Governor Jameel Ahmad said the extension has reduced Pakistan's gross external financing requirement for the current fiscal year to $21.5 billion, down from the IMF's earlier estimate of about $30 billion.
He said the improvement reflects the Saudi rollover, lower interest costs on external debt, repayments already completed and expected refinancing from China.
Pakistan has already repaid $2.2 billion in external debt this month. It also expects China to refinance a recently repaid $1.3 billion commercial loan. Lower borrowing costs have reduced financing needs by nearly $500 million, Ahmad said.
The remaining financing requirement includes about $7.3 billion in cash deposits, $3.5 billion in commercial loans maturing this fiscal year and $250 million owed to Kuwait under long-standing rolled-over deposits.
Meanwhile, the central bank bought around $9 billion in foreign currency from the domestic market during the last fiscal year, bringing total purchases over the past three years to $28 billion. Foreign exchange reserves are projected to reach $20.2 billion by the end of December.
The latest Saudi support comes as Pakistan continues rebuilding an economy that narrowly avoided sovereign default in 2023 following a balance of payments crisis, critically low foreign exchange reserves and heavy external debt repayments.
The IMF has since described Pakistan's implementation of its $7 billion Extended Fund Facility as strong, citing improved financing conditions, lower inflation and a continuing economic recovery. The Fund approved the programme's first review in May, unlocking about $1 billion alongside a $1.4 billion Resilience and Sustainability Facility to strengthen climate resilience.
The IMF has urged Pakistan to maintain fiscal discipline, broaden its tax base, reform the energy sector, improve the performance of state-owned enterprises and strengthen governance while rebuilding foreign exchange reserves.
Those commitments underpin Pakistan's 18.77 trillion rupee federal budget, which targets 15.26 trillion rupees in tax revenues and a primary surplus of 2 per cent of GDP to keep the IMF programme on track.
The Saudi extension gives Pakistan more time to meet its external obligations while reducing short-term refinancing risks. It also provides a stronger financial buffer as Islamabad seeks to sustain IMF-backed reforms, restore investor confidence and reduce its dependence on repeated short-term external support.
U.S. President Donald Trump has denied reports that he offered Iran sanctions relief and access to frozen funds in exchange for nuclear concessions...
Freight on the Baku–Tbilisi–Kars railway could soon move faster across borders after Georgia, Azerbaijan and Türkiye signed a new ...
At midnight on 30 September, the last U.S. troops are due to leave Iraq, ending a military presence that began with the 2003 invasion and cost the ...
A Russian guided aerial bomb has struck an apartment building in Kharkiv, injuring 22 people, including children, according to the city’s mayor. The strike follows a day of near-continuous Russian attacks across Ukraine that killed at least five people.
Here's your AnewZ Daily Brief for 28 September 2026. These are the top stories making headlines in technology.
Saudi Foreign Minister Prince Faisal bin Farhan has arrived in Washington for talks with U.S. Secretary of State Marco Rubio on bilateral ties and key regional and international developments, Saudi state news agency SPA reported.
Serbia's President Aleksandar Vučić resigned on Sunday, ending his second and final five-year term and paving the way for an early presidential election as the country prepares for a snap parliamentary vote on 25 October.
U.S. President Donald Trump has denied reports that he offered Iran sanctions relief and access to frozen funds in exchange for nuclear concessions.
Freight on the Baku–Tbilisi–Kars railway could soon move faster across borders after Georgia, Azerbaijan and Türkiye signed a new customs protocol aimed at cutting delays and streamlining transit.
Afghanistan and Belarus have agreed to expand health cooperation, with a focus on medicines, medical equipment and training healthcare workers, following talks between the two countries’ health ministers in Minsk on Tuesday (29 September).
Saudi Arabia is facing a widening security challenge from Yemen as Houthi forces consolidate recent territorial gains along the Red Sea coast and step up attacks on the kingdom.
Afghanistan’s Ministry of Defence says its forces killed 28 fighters and captured 32 others in Nuristan after armed groups, including alleged Islamic State members, crossed the border from Pakistan on Saturday.
Iran’s Islamic Revolutionary Guard Corps (IRGC) says it has captured a second U.S. military unmanned underwater vehicle in the Strait of Hormuz, as tensions between Tehran and Washington remain high.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment