Pakistan Seeks Additional Financial Support from Saudi Arabia Amid Reserve Pressures
Islamabad: Pakistan is exploring additional financial options to stabilize its foreign exchange reserves following Eurobond repayments and the return of funds to the United Arab Emirates.
According to official sources, the government is working on securing around $5 billion through alternative channels to strengthen reserves. In this regard, Pakistan has approached Saudi Arabia for additional deposits and has also requested an extension and expansion of the oil facility on deferred payments.
Sources said a proposal is under consideration for Saudi Arabia to establish a special fund to support Pakistan’s balance of payments. Discussions have also been held to enhance Saudi investment in key sectors including textiles, tourism, leather, pharmaceuticals, and minerals.
Additionally, talks are ongoing regarding potential Saudi investment of around $2 billion in solar energy projects, as well as possible funding in the railway sector. However, sources indicated that the Saudi side has sought investment guarantees, which Pakistan may not be able to provide under the conditions of the International Monetary Fund (IMF) program.
Officials confirmed that negotiations between the two countries are continuing, but no final agreement has been signed so far.
The government aims to ease pressure on the external account, with a target set under IMF conditions to increase State Bank reserves to $18 billion by June. The central bank is also permitted to purchase dollars from the market, a strategy it has used in previous years.
Pakistan plans to raise its foreign exchange reserves to $18 billion by June 2026 and further to approximately $20.5 billion by December 2026.
