In a major relief to the country’s economy, Saudi Arabia has rolled over $3 billion deposit with the State Bank of Pakistan (SBP) for another year.
“The Saudi Fund for Development (SFD) on behalf of the Kingdom of Saudi Arabia has extended the term for the deposit of USD 3 billion maturing on 05 December 2023 for another one year,” the SBP announced in a statement on Wednesday.
The extension of the term of the deposit is a continuation of the support provided by the kingdom to Pakistan, which will help to maintain the foreign currency reserves of Pakistan and contribute to the economic growth of the country, the statement added. The $3 billion deposit agreement was initially signed through the SFD with the SBP in 2021 and rolled over subsequently in 2022, after the issuance of the “royal directives that reflect the continuation of the close relationship between the two brotherly countries”.
“The $3 billion rollover is an important move in securing $25 billion in gross financing needs estimated by Pakistan for FY-24,” former adviser to the Ministry of Finance Khaqan Najeeb told media.
He said the extension in the deposit term would help solidify the ongoing IMF programme as the IMF was seeking confirmation from lenders and friendly countries of their commitments to Pakistan.
Moreover, the analyst said the rollover will pave the way for the IMF Executive Board’s approval for the second loan tranche of $700 million.
Pakistan’s economy is in dire straits with its foreign reserves depleting quickly amid less inflows from overseas investors.
