Saudi Arabia has agreed to keep its $5 billion deposit with the State Bank of Pakistan (SBP) in place for another three years, providing Pakistan with significant relief from near-term external debt repayments.
Senior SBP officials said the rollover will ease immediate pressure on the country’s external financing needs by postponing repayment of the deposit.
The officials added that Pakistan currently holds $8 billion in Saudi deposits, including $3 billion that was rolled over in April this year.
They noted that Pakistan’s external financing requirement has declined to $21.5 billion for the current fiscal year, reflecting an improvement in the country’s external payment position.
According to the central bank, annual interest payments on foreign debt have also fallen by nearly $500 million, reducing the overall burden of external liabilities.
SBP officials further disclosed that Pakistan has already repaid $2.2 billion in external loans during July, while the refinancing of a $1.3 billion Chinese commercial loan is expected next month.
To support foreign exchange reserves, the State Bank purchased around $9 billion from the open market during the last fiscal year.
The central bank is aiming to raise its foreign exchange reserves to $20.2 billion by December 2026, supported by improved external inflows, debt rollovers, and market interventions.
