Saudi Arabia Rolls Over USD 3 Billion Deposits With Pakistan For Another Year

Islamabad : Saudi Arabia has extended the maturity of its USD 3 billion deposit placed with Pakistan's central bank for another year, continuing a financial lifeline that has helped bolster the country's foreign exchange reserves amid ongoing liquidity crunch, a media report said Friday. While some analysts framed Saudi assistance as something that may carry future geopolitical expectations tied to defense cooperation, others argued that the rollover reflects weakness, not success, for Pakistan.

The extension, made through the Saudi Fund for Development (SFD), maintains a facility that has been in place since 2021 and rolled over repeatedly in support of Pakistan's macroeconomic stability, according to The Express Tribune.

The deposit, originally due to mature on December 8, 2025, will now remain parked with the central bank, the State Bank of Pakistan (SBP), until December 2026.

Officials said the extension reflects Riyadh's continued commitment to supporting Pakistan's economic foundation, helping strengthen reserve buffers and enabling the country to meet key International Monetary Fund (IMF) benchmarks.

This will help in strengthening the foreign exchange reserves of Pakistan and contribute to the country's economic growth and development, the SBP said in its communication.

As of November 28, 2025, Pakistan's total liquid foreign currency reserves stood at USD 19.59 billion, including USD 14.57 billion held by the central bank and USD 5.01 billion with commercial banks.

Speaking at an event in Karachi on Thursday, SBP Governor Jameel Ahmad said the country's external debt-to-GDP ratio has fallen from 31 per cent to 26 per cent, the first meaningful improvement in years.

Between 2015 and 2022, external debt increased by USD 6.4 billion annually. Now the direction has changed. We are stabilising instead of continuously accumulating debt, Ahmad said, adding that Pakistan has not added to external debt stock since 2022.

While the deposit rollover has largely been viewed positively, critics have also highlighted deep structural anxieties, particularly the perception that Pakistan remains dependent on Gulf support rather than undertaking durable fiscal reforms, the newspaper said.

Policy analysts argued that repeated extensions, while ensuring stability in the short term, delay difficult decisions required to fix issues related to exports, productivity, governance and investment climate.

Some regional analysts frame Saudi assistance as a strategic investment rather than unconditional aid, one that may carry future geopolitical expectations tied to defence cooperation or foreign policy alignment.

Economist and Khyber-Pakhtunkhwa Government Adviser Muzammil Aslam, while commenting on the celebratory tone surrounding the extension, argued that the rollover reflects weakness, not success.

This is not a favour. Pakistan pays interest, around 4 per cent previously and likely near 6 per cent now, he said. He claimed that Pakistan has failed to return any portion of short-term Gulf deposits in four years, estimating total rolled-over deposits from Saudi Arabia, China, and the UAE at USD 10-12 billion.

He likened the situation to a bank manager who spends a customer's deposit and then begs them not to withdraw. We have already spent it. We simply don't have the money to return, he remarked, adding that there is no real foreign investment, only announcements.

Waqas Ghani Kukaswadia, Research Head at JS Global, while speaking to The Express Tribune, said the rollover was expected and it's nothing out of the blue. Pakistan is expected to refinance or roll over nearly USD 16 billion this fiscal year, similar to last year.

This support, mainly from China and Saudi Arabia along with some multilateral institutions, is already part of our financial equation and embedded in SBP's projections, he said, adding that continuity under the IMF programme remains key to maintaining confidence.