Riyadh extends the additional financing for an unspecified period as Islamabad says it can manage external financing needs without a proposed $10 billion US support facility.
ISLAMABAD, PAKISTAN — WEB DESK: Pakistan has secured an extension of an additional $3 billion financial deposit from Saudi Arabia, Finance Minister Muhammad Aurangzeb has confirmed, providing continued support as the country manages its external debt repayments and foreign exchange requirements.
Speaking to reporters at Parliament House, Aurangzeb said Riyadh had extended the financing for a “reasonable period”. He did not disclose the new maturity date or the precise duration of the arrangement.
The facility, agreed in April 2026, had matured on October 31 under its earlier three-month term. Saudi Arabia provided the additional financing after Pakistan faced a $3.5 billion repayment to the United Arab Emirates.
Saudi support strengthens Pakistan’s external position
Aurangzeb said Pakistan’s strategic relationship with Saudi Arabia meant there was no need for concern about the rollover period. He also said Islamabad was not seeking additional financial assistance from the Kingdom at present.
The latest $3 billion extension is separate from Saudi Arabia’s existing $5 billion deposit, which has already been extended until 2028.
The rollover provides Pakistan with continued access to the financing while it works to meet external obligations and strengthen its foreign exchange position.
Pakistan says it can manage without proposed US facility
The announcement comes as prospects for a proposed $10 billion US liquidity support facility appear to have weakened.
Aurangzeb said the proposed facility would provide additional liquidity if secured, but Pakistan could continue managing its external accounts without it.
He pointed to Pakistan’s return to international capital markets, including a $3 billion Eurobond issuance in September that attracted orders worth around $6 billion, according to the finance minister’s remarks reported by local media.
The government is also considering further Eurobond and Panda bond issuances, alongside rupee-linked bonds settled in dollars, as part of its strategy to diversify financing sources and reduce reliance on expensive short-term borrowing.
Foreign exchange reserves and debt repayments
Aurangzeb said Pakistan’s foreign exchange reserves provided around three months of import cover, with the government aiming to increase that to four months by the end of the current fiscal year.
Separately, Finance Secretary Imdadullah Bosal told the Senate Standing Committee on Finance that the country’s external financing requirements for the fiscal year stood at approximately $21.5 billion, including principal repayments and interest obligations, according to reporting by The Express Tribune.
The government is seeking to replace costly short-term borrowing with longer-maturity financing to reduce refinancing pressure and avoid concentrating repayments in a single year.
Aurangzeb also said the IMF Executive Board was expected to consider Pakistan’s programme in December, although a specific meeting date had not been announced.
The Saudi rollover offers Pakistan additional breathing room, but the undisclosed extension period means the longer-term repayment schedule remains unclear.
