SAUDI Arabia will provide $3 billion in additional support for Pakistan to help the South Asian nation bridge a multi-billion dollar gap in its finances linked to an upcoming debt repayment to the UAE.
The extra funding for Pakistan comes on top of Riyadh extending the rollover arrangement for an additional $5bn deposit for a longer period, Pakistan Finance Minister Muhammad Aurangzeb told reporters in Washington.
The move underlines a deepening relationship between Riyadh and Islamabad, cemented last year by a mutual defence pact treating aggression against either as an attack on both.
“We can confirm that Saudi Arabia has agreed to a $3bn deposit with Pakistan to support their balance of payments,” a Saudi Ministry of Finance spokesperson told Reuters.
Pakistan faces a $3.5bn repayment to the UAE this month that has put a strain on its foreign exchange reserves, which stood at about $16.4bn as of March 27.
The repayment to the UAE amounts to roughly 18 per cent of those holdings.
Under Pakistan’s $7bn IMF programme, the country is targeting foreign exchange reserves of more than $18bn by June.
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