RIYADH: Saudi Arabia has extended the maturity of a $5 billion loan to Pakistan, providing much-needed financial relief to the cash-strapped nation, according to official sources.
The loan, originally granted to Pakistan for making payments to the United Arab Emirates, has been rolled over for an additional three-month period. The development comes as Pakistan continues to navigate a challenging macroeconomic environment marked by dwindling foreign reserves and a widening current account deficit.
Sources confirmed that the Saudi Fund for Development had provided the facility to support Pakistan’s external payment obligations to the UAE. The rollover ensures that Pakistan can meet its immediate international commitments without further straining its already depleted foreign currency reserves.
Islamabad has been in active discussions with multiple bilateral and multilateral partners to secure financing as it works to stabilize its economy. The Saudi rollover is seen as a critical vote of confidence in Pakistan’s ongoing efforts to implement fiscal reforms and secure an extended program with the International Monetary Fund (IMF).
The three-month extension gives Pakistan additional breathing room as it seeks to shore up its external financing gap. Analysts view Saudi Arabia’s continued financial support as pivotal for Pakistan’s ability to service its debt and maintain import flows in the coming quarters.
