Pakistan has received a $2 billion deposit from Saudi Arabia, providing crucial support to its foreign exchange reserves ahead of a $3.5 billion repayment to the United Arab Emirates (UAE) later this month, officials said on Thursday.
The State Bank of Pakistan (SBP) confirmed receipt of the funds from Saudi Arabia’s Ministry of Finance, while the finance ministry said the inflow forms part of a broader $3 billion financing commitment aimed at stabilising Pakistan’s external account position.
Officials said Saudi Arabia has also agreed to roll over its existing $5 billion deposits for an extended period, easing pressure on Islamabad’s annual refinancing requirements and strengthening reserve visibility.
The fresh inflow comes at a critical time for Pakistan, which is managing large external repayments while working to maintain reserve targets under its International Monetary Fund (IMF) programme. The UAE repayment alone represents nearly 18% of Pakistan’s official foreign exchange reserves.
Finance ministry officials said Pakistan is targeting foreign exchange reserves of around $18 billion in the coming months, equivalent to roughly 3.3 months of import cover, to improve macroeconomic stability.
Under a repayment schedule agreed with Abu Dhabi, Pakistan is set to return $3 billion in phases, with $2 billion due on April 17 and the remaining $1 billion on April 23. The country has already repaid an earlier $450 million obligation to the UAE.
Officials said Saudi financial support would help offset these outflows and stabilise liquidity in the external sector. With additional expected inflows, total Saudi deposits in Pakistan could rise to about $8 billion, they added.
Beyond deposits, Islamabad is also in discussions with Riyadh to renew and potentially expand a deferred oil payment facility currently valued at around $1 billion annually, under which Pakistan imports roughly $100 million worth of oil per month on deferred terms.
The government is also expecting about $1.21 billion in disbursements from the IMF next month, subject to approval by the lender’s executive board following a staff-level agreement.
In parallel, Pakistan is preparing to tap international capital markets through sovereign bond issuances and is exploring a Panda bond in China, alongside possible commercial borrowing to meet financing needs.
Officials said Pakistan currently holds approximately $12 billion in deposits from key bilateral partners, including $5 billion from Saudi Arabia, $4 billion from China, and $3 billion from the UAE, forming a key pillar of its external financing framework.