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Pakistan receives final $1 billion tranche from Saudi Arabia as reserves cross $21 billion

By The South Asia Times

ISLAMABAD - Pakistan's central bank has confirmed the receipt of the third and final installment of a $3 billion financial support package from Saudi Arabia, giving a much-needed boost to the country's depleting foreign currency reserves.

The State Bank of Pakistan announced on Tuesday that $1 billion was transferred on April 20 by Saudi Arabia's Ministry of Finance. This marks the completion of the $3 billion deposit agreement recently finalized between Islamabad and Riyadh.

The first tranche of $2 billion was received on April 15.

The fresh injection comes on top of Saudi Arabia's decision to roll over an existing $5 billion deposit for an extended period, Finance Minister Muhammad Aurangzeb revealed last week.

The rollover provides Islamabad with greater medium-term financial certainty as it navigates a challenging external financing environment.

The development underscores the deepening economic partnership between Pakistan and the Kingdom, which has historically stepped in to support its ally during balance of payments crises.

In a parallel move to manage its external liabilities, Pakistan has repaid $2 billion in debt to the United Arab Emirates, according to local media reports citing government officials. The repayment reduces Islamabad's financial exposure to Abu Dhabi.

The remaining $1.5 billion of the total $3.5 billion owed to the UAE is scheduled to be paid on Thursday.

As of the latest data, total liquid foreign exchange reserves stand at over $21 billion. This includes $16.4 billion held by the State Bank of Pakistan and approximately $5.49 billion held by commercial banks.