Islamabad: Pakistan’s skewed foreign reserves got a major boost after Saudi Arabia pledged an additional USD 3 billion in deposits while extending its existing USD 5 billion facility for a further three years.
Pakistan’s Finance Minister Muhammad Aurangzeb made the announcement in Washington while speaking to media representatives on the sidelines of the World Bank IMF Spring Meetings 2026 on Tuesday.
Aurangzeb said that the existing USD 5 billion Saudi deposit would no longer be subject to the previous annual rollover arrangement and would instead be extended for a longer term, Dawn reported on Wednesday.
The announcement came as Pakistan’s Prime Minister Shehbaz Sharif departed from Islamabad for an official visit to Saudi Arabia on the first leg of his three-nation tour, including Qatar and Turkiye, from April 15 to 18.
He said that the support from Saudi Arabia comes at a critical time for Pakistan’s external financing needs and would help reinforce foreign exchange reserves and strengthen the country’s external account.
The support was announced as Islamabad prepares to repay USD 3.5 billion to the United Arab Emirates (UAE) this month, which could bring its foreign reserves under pressure.
The IMF has stipulated that Pakistan’s three key bilateral creditors — Saudi Arabia, China and the UAE — must maintain their cash deposits with the country until the completion of the ongoing three-year programme.
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He said that the government is committed to maintaining reserves in line with its market obligations and targets under the IMF-supported programme, including the goal of building reserves to around USD 18 billion – equivalent to roughly 3.3 months of import cover – by the end of the fiscal year.
The finance minister noted that Pakistan had already repaid USD 1.4 billion in debts last week, including a Eurobond, and reassured that the government is committed to meeting all upcoming external obligations on time.
He noted that the government had deliberately refrained from commenting publicly in the absence of formal communication, despite media reports and speculation, as such matters required clarity and joint understanding before being shared.
Islamabad is advancing its broader external financing agenda, including the recently announced Global Medium-Term Note (GMTN) programme and the planned inaugural Panda Bond issuance, he added.
Dawn also reported that a day ago, speaking on the sidelines of the IMF World Bank annual spring meetings, Aurangzeb said the country could manage all debt repayments, and that its reserves remained at roughly 2.8 months of import cover.
Maintaining at least that level, he said, would be an important aspect of our overall macro stability as we go forward.
We are looking at Eurobond, we are looking at Islamic sukuk, we are looking at dollar-settled rupee-linked bonds, Aurangzeb said, adding that they expected to issue Eurobonds this year and are also exploring commercial loans.
