Saudi Arabia extends $3 billion deposit to Pakistan, says Finance Minister Aurangzeb

Saudi Arabia has extended a $3 billion financing facility for Pakistan for a "reasonable period", Finance Minister Muhammad Aurangzeb told reporters outside Parliament on Wednesday. The money was first provided in April for three months, when Islamabad needed to repay $3.5 billion to the United Arab Emirates.

Asked about reports that the facility had matured on October 31, Aurangzeb said there was no need to worry about the duration given the strategic relationship between the two countries. He added that a separate $5 billion Saudi facility, meant to bridge financing gaps, has already been extended to 2028.

The minister said Pakistan has not asked for extra support, arguing foreign exchange reserves cover more than three months of imports. He expects that cushion to grow to four months by the end of the year through capital market borrowing.

That market route is the heart of the story. Aurangzeb pointed to the $3 billion bond Pakistan issued in September, which drew orders worth $6 billion, as proof of renewed access. He also played down a $10 billion Exchange Stabilisation Support Facility sought from the US in July, calling it a welcome liquidity backstop but not essential. Further Eurobond, Panda bond and rupee-linked dollar-settled issues are on the cards, he said, with investors in Bangkok showing interest in five- and 10-year paper.

An IMF Executive Board meeting to approve a $1.2 billion disbursement is due in December. Aurangzeb also told a Senate committee the government aims to cut external debt by $4 billion this fiscal year and $3.5 billion next year, swapping costly short-term borrowing for longer maturities.

Finance ministry sources add that Pakistan is close to rolling over $4 billion in Chinese loans, expected in March 2027, plus $300 million from Kuwait, bringing planned one-year rollovers from Saudi Arabia, China and Kuwait to $7.3 billion. For investors watching emerging markets, the message is a steadier funding picture, with friendly lenders staying put and market access reopening.

Source: Kashmir Observer

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