Saudi Arabia has strengthened its financial support for Pakistan by committing an additional $3 billion in deposits and extending the existing $5 billion deposit arrangement, marking a major development in Saudi-Pakistani funding aimed at stabilizing external reserves.
The announcement was made by Finance Minister Muhammad Aurangzeb during his visit to Washington, D.C., where he attended the World Bank–IMF Spring Meetings 2026. The fresh inflow is expected to arrive within the coming week and will help Pakistan manage its external financing pressure.
According to the finance minister, the additional Saudi support comes at a critical time for Pakistan’s economy. He said the move will strengthen foreign exchange reserves and improve the country’s external account position, which has remained under strain due to ongoing debt repayments and import needs.
Extended Saudi Deposit Brings Financial Stability
Along with the new $3 billion injection, Saudi Arabia has also extended its existing $5 billion deposit for a longer period. Previously, this amount was rolled over on an annual basis. The new arrangement provides Pakistan with greater certainty and stability in its reserve planning.
Officials say the change will reduce short-term pressure on Pakistan’s foreign exchange reserves and help maintain macroeconomic stability during a challenging global financial environment.
The finance minister noted that Pakistan is targeting around $18 billion in reserves by the end of the fiscal year. This level would provide approximately 3.3 months of import cover, which is considered a more comfortable buffer for external payments.
Pakistan’s External Financing Strategy
Aurangzeb also highlighted that Pakistan continues to push forward with its broader external financing strategy. This includes preparations for a Global Medium Term Note program and the planned debut of a Panda Bond issuance in the Chinese market.
These steps are part of efforts to diversify funding sources and reduce reliance on short-term bilateral support. The government aims to improve access to international capital markets while maintaining discipline in debt management.
He said the $1.4 billion Eurobond was repaid on time, calling it a “non-event” that shows stronger repayment confidence.
High-Level Engagements with Saudi Leadership
During his Washington visit, Aurangzeb met the Saudi finance minister, SBP officials, and Pakistan’s embassy team. He also referenced earlier meetings in Islamabad, stating that both sides maintained close coordination before making the support package public. The finance minister expressed gratitude to the Saudi leadership for their continued financial cooperation.
Officials have not shared further details, but analysts say the deal shows continued financial support for Pakistan. Economists say the funding may improve investor confidence as Pakistan works to control inflation, debt, and reserves.
