ISLAMABAD: Saudi Arabia has extended its $5 billion deposit with the State Bank of Pakistan (SBP) for another three years, providing support to Pakistan’s external financing position as the country manages upcoming debt repayments.
Finance Minister Muhammad Aurangzeb and SBP Governor Jameel Ahmed confirmed the development on Wednesday, saying the rollover would help ease pressure on foreign exchange reserves and contribute to financial stability.
Speaking to reporters outside Parliament House after attending the Senate Standing Committee on Finance meeting, Ahmed said the extension would support Pakistan’s external account position during the current fiscal year.
The SBP governor said Pakistan’s foreign debt servicing requirements have declined to $21.5 billion in fiscal year 2026-27 from $26.5 billion in fiscal year 2024-25, mainly due to factors including lower interest rates.
Of the total $21.5 billion in foreign debt servicing obligations, around $3.5 billion will be allocated for interest payments during the current fiscal year, Ahmed said.
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Ahmed said nearly $12 billion of Pakistan’s foreign debt servicing requirement consists of deposits held with the central bank, while around $3 billion relates to commercial loans expected to be refinanced. The remaining foreign debt obligations stand at approximately $7 billion.
He said Saudi Arabia accounts for $8 billion of Pakistan’s deposits held with the SBP. Pakistan will require further rollovers for deposits due in December 2026 and March 2027.
During July 2026, the first month of the fiscal year, Pakistan made foreign debt repayments worth $2.2 billion. Ahmed said repayment pressure is expected to remain lower from August 2026 to June 2027.
The SBP governor said the central bank purchased $28 billion from the interbank market over the past three years to strengthen foreign exchange reserves. Around $9 billion was purchased during the previous financial year to build a buffer against external economic challenges.
Pakistan’s total foreign exchange reserves stood at $22.6 billion on July 17, 2026, including $17.2 billion held by the SBP and $5.4 billion held by commercial banks.
SBP reserves had risen to $18.4 billion by July 3, 2026, before declining due to debt repayments and other external financial obligations.
Responding to questions about higher debt servicing projections by the International Monetary Fund (IMF) for fiscal year 2027-28, Ahmed said the matter would be reviewed at a later stage.
For the current fiscal year, the SBP governor said Pakistan remains comfortable with its foreign debt repayment commitments. He added that the central bank will continue efforts to strengthen reserves and manage external risks, including possible increases in international fuel prices.
The Saudi deposit rollover is expected to provide additional financial support to Pakistan as it navigates external obligations and focuses on maintaining economic stability.
