The State Bank of Pakistan said in a news statement on Thursday that Saudi Arabia has extended a $3 billion deposit made with Pakistan for an additional year in order to keep supporting the economy.
The Saudi Fund for Development (SFD) and the State Bank inked a deal in November 2021 for the State Bank to receive $3 billion, which would be deposited into the SBP’s account to increase its foreign exchange reserves.
According to an SBP release, the agreement was signed at the State Bank in Karachi by then-SBP Governor Dr. Reza Baqir and SFD Chief Executive Officer Sultan Bin Abdul Rahman Al-Marshad.
The State Bank declared in November 2023 that Saudi Arabia had prolonged the deposit’s tenure by an additional year.
In a statement shared on social media platform X, the bank stated, “The Kingdom of Saudi Arabia, through the Saudi Fund for Development (SFD), has extended the term for the deposit of $3 billion, maturing on December 5, for another year.”
The SBP stated that the extension was an extension of the kingdom’s assistance to Pakistan and that it would boost the nation’s economic development and preserve foreign exchange reserves.
The $3 billion deposit matures today and will be extended for an additional year, per the press release issued on Thursday, a copy of which can be found on Dawn.com.
According to the press release, the extension is a “continuation of the support provided by the Kingdom of Saudi Arabia to the Islamic Republic of Pakistan, which will help strengthen the foreign exchange reserves of Pakistan and contribute to the country’s economic growth and development.”
“After the issuance of the royal directives that reflect the continuation of the close relationship between the two brotherly countries,” the announcement stated, the agreement was signed in 2021 and acknowledges the prior rollovers in 2022 and 2023.
Islamabad and Riyadh have a long history of fraternal ties and collaboration in a variety of fields, including trade, culture, economics, and defense.
In addition to having close bilateral relations, the Kingdom has frequently supported Pakistan in difficult economic times.
To enable the government access a $3 billion rescue package from the International Monetary Fund (IMF), Riyadh deposited $2 billion in the State Bank of Pakistan (SBP) in June 2023. In order to save the nation from going into sovereign default, the loan was essential.
