Saudi Arabia has deferred the repayment of a $5 billion loan for another three years, easing major financial pressure on Pakistan.
The State Bank of Pakistan confirmed that the rollover reduces immediate external debt repayment burdens and supports the country’s foreign exchange reserves.
Data from the central bank shows that Pakistan currently holds total Saudi deposits worth $8 billion, including new deposits of $3 billion received in April this year.
While outlining the country’s external payment obligations and economic roadmap, State Bank officials said, “Pakistan has to make total external payments of $21.5 billion during the current fiscal year, of which $18 billion represents the principal amount of loans.”
The central bank said that “out of this $21.5 billion, $11 billion in loans will be rolled over during the entire fiscal year, while interest payments on foreign debt have also decreased by $500 million compared with the previous period.”
Regarding repayments and incoming funds, a State Bank spokesperson said, “In July alone, external debt repayments worth $2.2 billion have already been successfully made, while the refinancing of a $1.3 billion loan from China is expected next month.”
According to the central bank, Pakistan purchased $9 billion from the open market during the previous fiscal year, which helped improve the country’s foreign exchange position.
Predicting further economic stability, State Bank officials expressed hope that “as a result of trade and financial measures, Pakistan’s total foreign exchange reserves will exceed the $20 billion mark by December 2026.”
