The Saudi Fund for Development (SFD), representing Saudi Arabia, has extended a $3 billion deposit with Pakistan for an additional year, set to mature on December 5, 2025, according to the State Bank of Pakistan’s announcement on Thursday.
This extension follows a meeting between Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammad Bin Salman in Riyadh two days ago during the “One Water Summit.”
Both leaders committed to enhancing their countries’ economic, trade, and investment ties at the meeting.
They were also pleased with the progress of implementing Saudi investment agreements and memorandums of understanding (MoUs) in Pakistan.
The central bank stated, “The amount has been placed with the State Bank of Pakistan on behalf of the Islamic Republic of Pakistan.”
“The deposit extension continues Saudi Arabia’s support for Pakistan, bolstering our foreign exchange reserves and contributing to economic growth,” the bank added.
Initially established in 2021, the $3 billion deposit has been rolled over annually following royal directives, illustrating the enduring ties between the two nations, as per the central bank.
In October, Pakistan and Saudi Arabia signed multiple MoUs totalling $2 billion to enhance bilateral trade and investment.
These agreements, secured during a visit by a top Saudi investment delegation, include a $70 million agricultural investment, semiconductor and textile industry development in Saudi Arabia, a white oil pipeline project, investment exploration, a hybrid power project, and transformer manufacturing in both countries.
Additional agreements involve cyber security initiatives, exporting Pakistani spices and vegetables, and establishing facilities for surgical and dental equipment manufacturing.
The agreements also support Pakistan’s federal E-Taaleem and digitalization programs.
Pakistan faced a potential default in 2022, which the International Monetary Fund (IMF) staved off with a stringent bailout. This resulted in significant economic adjustments and inflation hikes.
