Saudi Arabia rolled over $5 billion loan repayment for 3 years, Central Bank Chief

KARACHI: Saudi Arabia has rolled over the repayment of a $5 billion loan to Pakistan for three years, providing immediate relief on the country’s external payments, the State Bank of Pakistan said.

According to the central bank, the rollover has eased pressure on Pakistan’s short-term obligations. Pakistan currently holds $8 billion in deposits from Saudi Arabia. In April this year, Pakistan also received $3 billion from Riyadh.

The State Bank noted that Pakistan’s external financing needs have declined to $21.5 billion this year. Interest payments on foreign debt have dropped by nearly $500 million. In July alone, Pakistan repaid $2.2 billion in loans.

The central bank added that refinancing of a $1.3 billion commercial loan from China is expected next month. During the last fiscal year, the State Bank purchased $9 billion from the open market to support reserves.

The State Bank has set a target to raise foreign exchange reserves to $20.2 billion by December 2026.