Saudi Arabia Rolls Over $3 Billion Loan to Pakistan
Finance Minister Muhammad Aurangzeb announced Saudi Arabia extended a $3 billion loan rollover to support Pakistan's foreign exchange reserves and external debt management.
Saudi Arabia has extended the rollover of a $3 billion short-term loan to Pakistan for a reasonable period, providing critical relief after the debt matured in October. Finance Minister Muhammad Aurangzeb announced the extension at Parliament House, stating that the country does not currently require additional financial assistance from the kingdom.
Pakistan is currently managing 21.5 billion dollars in external financing requirements for the year. To address these obligations, the government is relying on bilateral rollovers and diversifying its financing through Panda bond and Eurobond issuances. The government aims to reduce external debt servicing to 3.5 billion dollars in the next fiscal year, down from an estimated 4 billion dollars this year, while seeking a sovereign credit rating upgrade to B-plus.
Currently, Pakistan holds 21.5 billion dollars in foreign exchange reserves, providing three months of import cover. The government intends to increase this to four months by the end of the fiscal year. Additionally, the International Monetary Fund is tentatively scheduled to review Pakistan's 7 billion dollar program in December, with the board expected to approve two loan tranches totaling 1.2 billion dollars. Pakistan is also pursuing a proposed 10 billion dollar liquidity support facility from the United States.
