Saudi Arabia Extends Lifeline to Pakistan with $3 Billion Deposit

In a significant move that underscores the enduring relationship between Saudi Arabia and Pakistan, the Kingdom has officially announced the extension of its $3 billion deposit facility with the State Bank of Pakistan (SBP) for an additional year. This strategic decision is set to bolster Pakistan’s foreign exchange reserves and contribute significantly to the stability of the country’s economy.

The initial $3 billion deposit agreement was signed in 2021 through the Saudi Fund for Development (SFD) with the SBP. Following royal directives that reflect the close ties between the two nations, the agreement was renewed in 2022. The deposit, which was originally set to mature on December 5, 2023, has now been extended.

The funds, strategically placed with the SBP, play a pivotal role in helping Pakistan maintain its foreign exchange reserves. The extension of the deposit term is anticipated to further fortify Pakistan’s foreign currency reserves, fostering economic growth and financial stability.

This extended term of the deposit facility underscores Saudi Arabia’s commitment to stand by Pakistan during challenging economic times. The financial assistance provided by the Kingdom has proven instrumental in bolstering Pakistan’s economic resilience, allowing for strategic planning and development initiatives.

The financial aid from Saudi Arabia comes at a crucial time for Pakistan, which has faced growing economic challenges, including high inflation, sliding forex reserves, a widening current account deficit, and a depreciating currency. This support is expected to provide a much-needed boost to Pakistan’s economy and help it navigate through these challenging times.

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