Saudi Arabia rolls over $5bn deposit, easing Pakistan's external financing pressure

Pakistan's external financing pressure has eased after Saudi Arabia rolled over a $5 billion cash deposit for three years, reducing the country's gross external financing requirements to $21.5 billion for the current fiscal year, State Bank of Pakistan (SBP) Governor Jameel Ahmad said.

Speaking at the Parliament House on Wednesday, the SBP governor said the extension of the Saudi deposit until December 2028, along with reduced interest costs on foreign debt, had significantly lowered Pakistan's external financing needs.

Pakistan currently holds $8 billion in Saudi cash deposits, including $3 billion received in April this year. Of the total, the $5 billion deposit, previously renewed annually, has now been extended for three years. Ahmad did not confirm whether the remaining $3 billion deposit had also been rolled over for a longer period.

The governor said Pakistan's gross external financing requirement for the current fiscal year stands at $21.5 billion, including $7.3 billion in cash deposits and $3.5 billion in foreign commercial loans maturing during the year. He added that Pakistan also has a $250 million cash deposit from Kuwait that has been rolled over for an extended period.

Ahmad said Pakistan repaid a $1.3 billion Chinese commercial loan this month, reducing the country's foreign exchange reserves to $17.3 billion as of July 17. However, he said China is expected to refinance the loan and release the funds next month.