Saudi Arabia extends rollover of $5bn deposit with Pakistan for three years, says SBP governor

Pakistan's external financing outlook has improved after Saudi Arabia extended the rollover of its $5 billion deposit for three years, helping reduce the country's gross external financing requirement to $21.5 billion for the current fiscal year, according to State Bank of Pakistan (SBP) Governor Jameel Ahmad.

 

Speaking in Islamabad, the SBP governor said the longer-term rollover, valid until December 2028, forms part of the government's strategy to replace annual debt renewals with multi-year arrangements, providing greater financial stability and easing near-term repayment pressures.

 

Pakistan currently holds $8 billion in Saudi cash deposits, including a separate $3 billion deposit received in April. Ahmad also noted that lower interest costs on external debt have reduced the country's financing needs by nearly $500 million.

 

He added that Pakistan's gross external financing requirement for FY27 stands at $21.5 billion, including $7.3 billion in cash deposits and $3.5 billion in commercial loans maturing this year. Net debt repayments are estimated at $7.5 billion, of which $2.2 billion has already been repaid in July.

 

The governor further revealed that the SBP purchased around $9 billion from the domestic foreign exchange market during the last fiscal year to strengthen reserves, bringing total FX purchases over the past three years to $28 billion.

 

Pakistan's foreign exchange reserves declined to $17.3 billion after the repayment of a $1.3 billion Chinese commercial loan this month, although the governor said the loan is expected to be refinanced by China in the coming weeks.

 

Separately, Ahmad told the Senate Standing Committee on Finance that banks, rather than the government, will now bear the cost of processing overseas remittances, ensuring remitters are not charged additional fees. He also clarified that SMS banking alerts remain optional and confirmed that domestic Visa card transactions will continue to be settled in Pakistani rupees rather than US dollars.