Saudi Arabia Defers $5 Billion Loan Repayment for Pakistan

The Government of Saudi Arabia has agreed to roll over $5 billion in deposits provided to Pakistan for a period of three years. According to State Bank of Pakistan Governor Jameel Ahmad and Finance Minister Muhammad Aurangzeb, this deferment reduces immediate pressure on the external account and lowers the country's external financing requirements for the current fiscal year to approximately $21.5 billion.

This financial relief includes a $500 million decrease in interest payments on foreign loans. Pakistan currently holds $8 billion in total deposits from Saudi Arabia, which incorporates a $3 billion sum rolled over in April 2026. In July 2026, Pakistan repaid $2.2 billion in external debt.

Looking forward, the State Bank of Pakistan is targeting foreign exchange reserves of $20.2 billion by December 2026. This goal follows the purchase of $9 billion from the open market during the previous financial year to buffer against economic shocks. Additionally, Pakistan expects to refinance a $1.3 billion commercial loan from the Government of China next month.