KARACHI: Pakistan has received $1 billion from Saudi Arabia as the second tranche of a $3 billion financial deposit, providing temporary relief to the country’s foreign exchange reserves. The State Bank of Pakistan confirmed that the amount was transferred on April 20, 2026, following an earlier $2 billion disbursement last week.
The latest inflow comes at a critical time for Pakistan’s economy, which is facing mounting external financing pressures. The funds are part of a broader financial support package agreed between Islamabad and Riyadh to help stabilize the country’s fragile economic situation and meet obligations under the International Monetary Fund programme.
The development follows Prime Minister Shehbaz Sharif’s recent visit to Saudi Arabia, where discussions focused on strengthening economic ties and promoting regional peace. In addition to the $3 billion deposit, Saudi Arabia also pledged an extra $3 billion and extended its existing $5 billion facility for another three years, offering further support to Pakistan’s struggling external account.
Despite this financial boost, challenges remain. Pakistan is expected to repay a $3.5 billion loan to the United Arab Emirates later this month, which could significantly strain its foreign exchange reserves. As of March 27, reserves stood at approximately $16.4 billion, covering nearly three months of imports.
Earlier attempts by Islamabad to secure a rollover of the UAE loan were unsuccessful, marking the first such instance in seven years and raising concerns about short-term financing gaps. Analysts warn that while Saudi deposits provide temporary relief, they do not fully address underlying vulnerabilities in Pakistan’s external sector.
Rising global oil prices and ongoing geopolitical tensions in the Middle East are further adding pressure on Pakistan’s economy. These factors have increased import costs and complicated efforts to maintain stability under IMF-backed reforms.
Experts believe that maintaining adequate foreign exchange reserves and securing external financing will remain crucial for Pakistan in the coming months. Continued support from friendly countries and adherence to IMF conditions will be key to sustaining economic stability and avoiding further financial stress.
