Saudi Arabia and Qatar will provide $5 billion in financial assistance to Pakistan to minimise stress on foreign reserves while making external debt payments.
Pakistan needed to repay $3.5 to the United Arab Emirates (UAE) by the end of this month, which could drastically decrease the foreign reserves.
According to the media reports, Saudi Arabia has assured Pakistan of financial support amid mounting external pressures and rising costs linked to the ongoing Middle East tensions.
Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan called on Prime Minister Shehbaz Sharif in Islamabad on Friday.
Pakistan has requested additional financial assistance, including an expansion of existing cash deposits and an extension of its oil financing facility, which is set to expire later this month.
The repayment to the UAE comes as Pakistan targets foreign exchange reserves above $18 billion by June under a $7 billion International Monetary Fund (IMF) programme, which requires bilateral deposits to be rolled over.
The loan had been rolled over since 2018, including a $3 billion facility at around 6% annual interest, but was shifted from annual to monthly extensions earlier this year before Pakistan decided to repay it in full. Another $450 million UAE loan has remained overdue for years. This amount is part of the total $3.5 billion being repaid.
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