Saudi Arabia has pledged an additional $3 billion in support for Pakistan as well as extended its existing $5 billion loan for a longer term, Pakistan’s Finance Minister Muhammad Aurangzeb said on Tuesday.
The move is aimed at easing pressure on the country’s external financing needs and strengthening its foreign exchange reserves.
The payment is expected to be disbursed in the coming week, Mr Aurangzeb said during the World Bank-International Monetary Fund Spring Meetings in Washington. The loan is expected to help Pakistan meet its target of building its reserves to $18 billion by the end of the fiscal year, he was quoted as saying in an X post by Pakistan’s Ministry of Finance.
“Saudi Arabia’s timely financial support” provided Pakistan with “important momentum and confidence”, both for the economy and externally, he added.
Pakistan’s total external debt and liabilities stood at $138 billion, with external public debt at about $92 billion, the ministry said in February.
Of the total external public debt, nearly 75 per cent comprises concessional and long-term financing obtained from multilateral institutions (excluding the IMF) and bilateral development partners. Commercial loans account for about 7 per cent, while another 7 per cent relates to long-term Eurobonds.
The South Asian nation, which has a $7 billion programme with the IMF, has been facing severe financial strain with loan repayments. Its foreign exchange reserves stood at about $16.4 billion as of March 27. The country is due to repay a total of $3.5 billion in debt to the UAE by the end of this month.
Mr Aurangzeb said on Tuesday that Pakistan had successfully repaid its $1.4 billion Eurobond last week, describing the repayment as a “non-event”. He stressed that the government remained fully committed to meeting all upcoming external obligations and maturities on time.
He emphasised that Pakistan’s external financing plan is clearly defined and being implemented in a responsible and disciplined manner.
