ISLAMABAD - In a significant development, Saudi Arabia has extended term for the $3 billion deposit placed with Pakistan as a gesture of support for its economy.
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 said amount has been placed with State Bank of Pakistan (SBP) on behalf of Pakistan. The extension of the term of the deposit is a continuation of the support provided by the Kingdom of Saudi Arabia to Pakistan, which will help to maintain the foreign currency reserves of Pakistan and contribute to the economic growth of the country.
It is worth noting here that the USD3 billion-deposit agreement was initially signed through the SFD with the SBP in the year 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.
Pakistan is projected to receive the IMF loan’s next tranche of $700 million in December after the Fund’s executive board gives its final approval soon.
The approval would unlock another $1.5-2 billion in financing from other multilateral and bilateral creditors, including the World Bank (WB) and Asian Development Bank (ADB).
A leading financial expert stated that the inflows are expected within a couple of months, which would not only boost the country’s foreign exchange reserves (held by SBP) but also support the rupee against foreign currencies.