Saudi Arabia rolls over $3bn loan to Pakistan

Federal Finance Minister confirmed the development, describing it as a timely boost for Pakistan's economy. The financial support, which was initially arranged to help Pakistan

ISLAMABAD: Saudi Arabia has extended the tenure of its $3 billion financial facility to Pakistan, providing significant relief to the country’s external financing position and reducing immediate repayment pressure.

Federal Finance Minister confirmed the development, describing it as a timely boost for Pakistan’s economy. The financial support, which was initially arranged to help Pakistan meet its payment obligations to the United Arab Emirates (UAE), was originally granted for a three-month period.

With the extension now in place, Pakistan has gained additional fiscal breathing space as it continues to manage its external liabilities and strengthen foreign exchange reserves.

Officials at the State Bank of Pakistan said the rollover of external financial support, amounting to $5 billion in total, has further reinforced the country’s foreign exchange position while easing short-term external payment obligations.

According to government officials, Saudi Arabia currently holds $8 billion in deposits with Pakistan. They added that Pakistan had secured the $3 billion facility from the Kingdom in April this year.

For the fiscal year 2026–27, Pakistan’s external financing requirement has declined to $21.5 billion, reflecting an improvement in the country’s financial outlook. Officials also noted that interest payments on foreign debt have fallen by nearly half a billion dollars, helping reduce the overall debt-servicing burden.

The State Bank further revealed that Pakistan repaid $2.2 billion in external loans during July. Despite these repayments, Saudi Arabia’s decision to extend the loan has provided a crucial financial cushion, supporting economic stability and strengthening investor confidence.