Pakistan has successfully secured a rollover of $3 billion in deposits from Saudi Arabia, Finance Minister Muhammad Aurangzeb confirmed during a Senate Standing Committee meeting on Wednesday, providing crucial breathing room for the country’s external financing needs.
The announcement comes as welcome relief amid Pakistan’s ongoing efforts to stabilize its economy and manage mounting debt obligations. The Saudi rollover forms part of a broader $7.3 billion in bilateral deposit rollovers that Pakistan has arranged with friendly nations to shore up its foreign exchange position.
Speaking before the Senate panel, Aurangzeb sought to project confidence about Pakistan’s economic trajectory, even as he acknowledged that the United States had declined Islamabad’s request for a $10 billion Liquidity Support Programme. The finance minister emphasized that Pakistan’s external accounts remain in a comfortable position regardless of American assistance.
“With or without $10 billion from the USA, we are in a comfortable position with regard to our external accounts,” Aurangzeb told senators, clarifying that the US request was neither a guaranteed credit line but rather a proposal for liquidity support that would have been beneficial but is not essential.
The minister declined to specify the exact duration of the Saudi rollover, though sources familiar with the arrangement suggest Riyadh has likely extended the $3 billion deposit for one year covering the current fiscal year. This comes on top of an existing $5 billion Saudi deposit that has already been rolled over until 2028, bringing total Saudi financial support to $8 billion.
Beyond Saudi Arabia, Pakistan has also secured deposit rollovers from China totaling $4 billion through SAFE deposits, and an additional $300 million from Kuwait, according to finance ministry officials.
Federal Finance Secretary Imdad Ullah Bosal provided detailed figures showing Pakistan faces gross external financing repayments of $21.5 billion for the current fiscal year, comprising $17 billion in principal payments and $4 billion in interest. However, with the bilateral rollovers factored in, the actual repayment burden drops to approximately $14 billion.
The government has already repaid $5 billion over the past five months and expects to service only $6 billion in external debt over the remaining seven months of the fiscal year, officials said. Pakistan is also considering avoiding $3.2 billion in commercial refinancing due to prohibitively high costs.
In a positive development, the committee learned that Pakistan’s public debt has declined from 75.1 percent of GDP in fiscal year 2023 to 68.6 percent in fiscal year 2026, reflecting improved debt management. The country’s foreign exchange reserves currently stand at $21.5 billion, providing a cushion for upcoming obligations.
The finance minister also briefed senators on the government’s Annual Borrowing Plan, which projects public debt reaching Rs86.7 trillion with additional borrowing requirements of Rs6.86 trillion. Officials emphasized ongoing efforts to retire short-term debt, improve the overall debt profile, and enhance Pakistan’s credit ratings to access cheaper financing in international markets.
During the session, Senate panel chairman Saleem Mandviwalla raised concerns about difficulties parliamentarians face in obtaining foreign exchange for personal travel, directing the State Bank of Pakistan to review cumbersome procedures including mandatory personal appearances at exchange companies despite valid documentation.
The Saudi deposit rollover represents a critical lifeline for Pakistan as it navigates a challenging external financing environment while working to maintain macroeconomic stability under its ongoing International Monetary Fund program.
