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Saudi Arabia and Pakistan have a strong and enduring relationship, built on mutual cooperation in areas such as trade, energy, defense, and culture.
This partnership is particularly vital for Pakistan’s economy, as Saudi Arabia is one of the largest sources of foreign remittances and employment opportunities for Pakistani nationals abroad.
Labor Migration and Remittances
Saudi Arabia has long been a leading destination for Pakistani expatriates seeking better job prospects. It continues to be one of the largest employers of Pakistani migrant workers in sectors such as construction, healthcare, hospitality, and retail. These workers play a crucial role in Pakistan’s economy, regularly sending significant remittances to support their families back home.
Remittances from Saudi Arabia are a major contributor to Pakistan’s foreign exchange reserves and play a vital role in improving the living standards of many families. In fact, Saudi Arabia is Pakistan’s largest source of remittances, with billions of dollars sent annually. These financial flows have a direct, positive effect on the country’s economy, aiding in poverty reduction, household welfare, and overall national development.
Exchange Rate and Economic Impact
On Friday, the Saudi Riyal remained unchanged in Pakistan’s open market, with the buying rate holding at Rs73.65 and the selling rate also steady at Rs74.2.
The exchange rate between the Saudi Riyal and the Pakistani Rupee reflects the economic relationship between the two countries, offering a fair conversion rate for the remittances sent by the millions of Pakistani workers in Saudi Arabia. For many Pakistanis, the value of the Riyal is a critical factor in supporting their families back home, and a stable exchange rate is essential to protect their hard-earned income from market volatility or fraudulent currency practices.
Bilateral Cooperation and Strategic Importance
In addition to financial and labor ties, Saudi Arabia plays a crucial role in Pakistan’s foreign policy. Both countries share mutual concerns about regional security, particularly concerning the Middle East, Afghanistan, and the global fight against extremism. Over the years, Saudi Arabia has supported Pakistan through economic aid, concessional loans, and joint defense initiatives.
The cultural and religious ties between the two nations further strengthen their bond. Saudi Arabia, home to Islam’s two holiest cities, Mecca and Medina, is a significant destination for Pakistani pilgrims performing Hajj and Umrah annually. This shared religious connection deepens the friendship, reinforcing a mutual commitment to Islamic values and traditions.