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Saudi Arabia extends term of $3bn deposit to Pakistan

Pakistan's finance minister Ishaq Dar. The Saudi deposit into Pakistan’s central bank is intended to strengthen the country's economy Reuters/Ariba Shahid
Pakistan's finance minister Ishaq Dar. The Saudi deposit into Pakistan’s central bank is intended to strengthen the country's economy

The Saudi Fund for Development (SFD) has extended the period for its deposit of $3 billion to Pakistan for another year.

The agreement, signed in 2021, was rolled over in 2022, the State Bank of Pakistan said in a statement.

The deposit into Pakistan’s central bank was intended to boost its foreign exchange reserves and strengthen its economy.

“Certainly, the rollover helps solidify the IMF agreement as we move closer to meeting the gross financing needs of the country. This should help pave the way for the next tranche of $700 million as the board approval comes through,” Dr Khaqan Hassan Najeeb, a former advisor to Pakistan’s ministry of finance, told Reuters.

Pakistan is expected to receive the next tranche of $700 million from a $3 billion International Monetary Fund loan arrangement in December.

The approval unlocks $1.5-$2 billion in financing from other multilateral and bilateral creditors, including the World Bank and Asian Development Bank.

In July, finance minister Ishaq Dar said the UAE deposited $1 billion in Pakistan’s central bank.

Saudi King Salman bin Abdulaziz announced an investment of $1 billion in Pakistan to support the South Asian country’s economy, Saudi state TV reported in August last year.

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