Saudi Arabia Pledges $3bn Support to Pakistan, Extends $5bn Loan Tenure to Ease Debt Pressure

email: online@newsofbahrain.com 

Islamabad: Saudi Arabia has pledged an additional $3 billion in financial support to Pakistan and extended the tenure of an existing $5 billion loan, in a move aimed at easing Islamabad’s external financing pressures and boosting its foreign exchange reserves.

Pakistan’s Finance Minister Muhammad Aurangzeb announced the development during the World Bank-IMF Spring Meetings in Washington DC, stating that the fresh funds are expected to be disbursed within the coming week.

He said the support would help Pakistan achieve its target of raising foreign exchange reserves to $18 billion by the end of the fiscal year. As of late March, the country’s reserves stood at approximately $16.4 billion.

Aurangzeb described Saudi Arabia’s assistance as “timely,” adding that it provides “important momentum and confidence” for both the domestic economy and external financial position.

Pakistan, which is currently under a $7 billion programme with the International Monetary Fund, has been grappling with mounting external debt obligations. The country’s total external debt and liabilities were estimated at $138 billion, including about $92 billion in public external debt.

Officials said nearly 75 per cent of this debt comprises concessional and long-term financing from multilateral institutions and bilateral partners, while commercial loans and Eurobonds each account for around 7 per cent.

The South Asian nation faces continued repayment pressures, including $3.5 billion due to the United Arab Emirates by the end of the month.

Aurangzeb noted that Pakistan successfully repaid a $1.4 billion Eurobond last week, calling the transaction a “non-event” and reaffirming the government’s commitment to meeting all upcoming debt obligations on time.

He added that Pakistan’s external financing plan remains clearly defined and is being implemented in a “responsible and disciplined manner,” as the country works to stabilise its economy.