Saudi Arabia has extended the duration of a $3 billion deposit it made in the State Bank of Pakistan (SBP) through the Saudi Fund for Development (SFD) to help the nation’s economy, the SBP reported on Friday.
The choice was made in accordance with the royal instructions of King Salman bin Abdulaziz Al Saud, according to a press announcement.
The SBP and SFD inked a contract in November of last year for the SBP to receive $3 billion, which would be deposited in the central bank’s account in an effort to increase its foreign exchange reserves.
The extension in the term “contributed to meet external sector challenges and ensure sustained economic growth for the country,” the SBP statement from today noted.
“The extension of the term of the deposit is a continuation of the support provided by the Saudi Arabian government to the Islamic Republic of Pakistan,” the statement concluded. “The deposit aimed to shore up the foreign currency reserves in the SBP and help Pakistan in facing the economic repercussions of the Covid-19 pandemic.”
The SFD had announced in September that a $3 billion deposit would be carried over for another year. On December 5, the deposit was scheduled to expire.
Saudi Arabia had previously committed to restart its financial assistance to Pakistan in the final week of October 2021, providing $1.2 billion in oil deliveries on a deferred payment plan and around $3 billion in safe deposit boxes.
The agreement was reached during the visit of former prime minister Imran Khan to the kingdom the same month.
PM Shehbaz went on to say that the kingdom had, once again, played the role of an “elder brother”.
Finance Minister Ishaq Dar also announced the extension on Twitter, ending it with “Long live Pak-Saudi friendship!”
