Why did Saudi Arabia send another $1 billion to Pakistan now?
Islamabad: Pakistan has secured the second and final $1 billion tranche from Saudi Arabia, completing a $3 billion deposit package intended to support the country’s foreign exchange reserves.
The transfer was confirmed by the State Bank of Pakistan, which said the funds were received on April 20, 2026.
Total Saudi support rises to $8 billion
With this latest disbursement, Saudi Arabia’s total cash deposits with Pakistan’s central bank have reached $8 billion, making it the largest single-country financial supporter of Islamabad’s reserves.
The latest funding comes shortly after Riyadh pledged the $3 billion deposit and extended an existing $5 billion facility for another three years.
The financial support comes after Prime Minister Shehbaz Sharif’s recent visit to Saudi Arabia, where discussions focused on strengthening ties and addressing regional tensions in West Asia.
The timing highlights ongoing economic cooperation between the two countries amid broader geopolitical challenges.
Pressure from loan repayments and regional tensions
Pakistan’s economy remains under pressure due to external debt obligations and regional instability. The Saudi deposit comes at a critical time, as Islamabad recently repaid $2 billion to the United Arab Emirates after failing to secure a rollover agreement on a larger $3.5 billion loan.
Tensions linked to the West Asia conflict have also impacted Pakistan’s external financial position and relations with some regional partners.
Pakistan is also working to stabilise its economy through a $1.2 billion loan programme with the International Monetary Fund (IMF). However, continued access to IMF support depends on meeting strict programme conditions.
As of March 27, Pakistan’s foreign exchange reserves stood at $16.4 billion, enough to cover nearly three months of imports.
While the Saudi financial support provides short-term relief, Pakistan continues to face structural economic challenges, including managing external debt, maintaining reserves, and navigating global and regional uncertainties.
The latest inflow is expected to ease immediate pressure, but long-term stability will depend on sustained reforms and external financing support.
(With PTI inputs)