ISLAMABAD: Pakistan’s foreign exchange reserves have received a significant boost after Saudi Arabia transferred $1 billion as part of a larger financial support package, the central bank confirmed on Tuesday.
The State Bank of Pakistan stated that the amount was received on April 20 as the second tranche of a previously agreed $3 billion deposit facility. Earlier, $2 billion had already been disbursed under the same arrangement.
The financial assistance follows high-level engagements between Islamabad and Riyadh, including Prime Minister Shehbaz Sharif’s recent visit aimed at enhancing economic cooperation and regional diplomacy.
In a further show of support, Saudi Arabia has also committed an additional $3 billion in deposits and extended its existing $5 billion financial facility for another three years.
However, the positive development comes against the backdrop of mounting external financial obligations. Pakistan is set to repay $3.5 billion to the UAE this month, a move that could strain its reserve position and complicate compliance with IMF programme requirements.
The country’s foreign exchange reserves were reported at $16.4 billion as of late March, providing import cover for approximately three months. Still, analysts warn that the situation remains fragile, particularly after Pakistan was unable to secure a rollover of the UAE facility — a departure from past practice.
Economists highlight that Pakistan’s external sector continues to face risks from fluctuating oil prices and global economic uncertainty, especially in light of tensions in the Middle East.
While Saudi financial inflows offer short-term breathing space, experts stress the need for sustained reforms and stable inflows to ensure long-term economic resilience.
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