Saudi Arabia extends term of $3B deposit to Pakistan for another year

By Aamir Latif

KARACHI, Pakistan (AA) - Saudi Arabia has extended the term for a deposit of $3 billion to Pakistan for another year, the country's central bank said on Wednesday.

“The Saudi Fund for Development (SFD), on behalf of the Kingdom of Saudi Arabia, has extended the term for the deposit of $3bn, maturing on December 5, for another year,” the State Bank of Pakistan (SBP) said in a statement.

It said the extension is a continuation of the kingdom’s support to Pakistan, which would help maintain the South Asian country's depleting foreign exchange reserves.

The deposit agreement was initially signed with the SFD in November 2021 and was rolled over in 2022.

In July, Pakistan received an additional $2 billion in financial assistance from Saudi Arabia, raising the total deposits up to $5 billion.

The latest extension, according to economists, is likely to strengthen Islamabad's case in future talks with the International Monetary Fund (IMF) over the release of the remaining tranches of a $3 billion stand-by agreement in June this year.

Pakistan has already received the first tranche of $1.2 billion, and is likely to get the second tranche of $700 million next month.