Pakistan secures $3bn Saudi funding to ease debt pressure ahead of UAE repayment

Pakistan has received $3 billion from Saudi Arabia to strengthen its foreign reserves ahead of a $3.5 billion repayment to the UAE. The funds are meant to support its balance of payments and ease financial pressure. An existing $5 billion Saudi deposit will also be extended, reflecting continued economic cooperation between both countries.

Pakistan has received $3 billion in financial support from Saudi Arabia to help stabilize its foreign exchange reserves at a time when the country is facing significant external debt pressures.
A spokesperson from Saudi Arabia’s Ministry of Finance confirmed that the deposit had been agreed to support Pakistan’s balance of payments position, according to reports from Reuters. The arrangement is intended to provide short-term financial relief and improve Pakistan’s ability to meet its external obligations without further straining its reserves.
The timing of the funding is considered crucial because Pakistan is expected to make a $3.5 billion repayment to the United Arab Emirates this month. This repayment represents a substantial portion of the country’s foreign reserves, estimated at about 18%, raising concerns about liquidity and economic stability.
In addition to the new deposit, Pakistan’s Finance Minister Muhammad Aurangzeb stated that an existing $5 billion Saudi deposit would also be extended for an unspecified period. This extension is expected to further ease pressure on Pakistan’s external accounts and provide additional financial breathing space as the country continues to manage its debt commitments.
The announcement also comes shortly before Prime Minister Shehbaz Sharif’s planned diplomatic visit to Saudi Arabia, Qatar, and Turkey, highlighting ongoing efforts to strengthen Pakistan’s regional partnerships. Saudi Finance Minister Mohammed Al-Jadaan had recently visited Pakistan, according to sources cited in reports, reflecting continued high-level engagement between the two countries.
Over the years, Saudi Arabia and Pakistan have developed close economic and security relations. In 2018, Saudi Arabia announced a $6 billion financial support package for Pakistan, aimed at supporting its struggling economy. More recently, both countries signed a mutual defence agreement that states any aggression against one would be treated as an attack on both, further deepening strategic ties.
Pakistan has also taken on a more active diplomatic role in the Middle East in recent years. It has been involved in mediation efforts between global powers such as the United States and Iran, while also maintaining security cooperation with Gulf partners, including Saudi Arabia. Reports have also indicated that Pakistan deployed fighter jets and support aircraft to Saudi Arabia following Iranian strikes on key energy infrastructure, underscoring the growing defence cooperation between the two countries.