Pakistan Saudi Financial Support Talks: $5B Deposit Plan and Oil Facility Expansion

Pakistan has started new Pakistan Saudi support talks to strengthen long-term economic cooperation. Officials requested financial assistance and expanded oil financing from Saudi Arabia. These discussions come as Pakistan faces economic pressure. In addition, the country continues negotiations with the International Monetary Fund (IMF) over its $7 billion program.

Request to Convert $5 Billion Deposit

Pakistan asked **Saudi Arabia to convert an existing $5 billion deposit into a long-term facility. Currently, the funds sit as short-term deposits at the State Bank of Pakistan.
Officials want the new arrangement to last ten years. They also hope to secure better pricing terms. As a result, the move could improve financial stability. It may also reduce pressure on Pakistan’s foreign reserves.
Islamabad also requested a major expansion of its oil financing facility. At present, the deferred oil payment arrangement stands at $1.2 billion. However, Pakistan wants to increase the facility to $5 billion. In addition, it seeks to extend the repayment period.
Under the proposal, each oil tranche would have a three year repayment timeline. Currently, payments must be cleared within one year. Therefore, longer repayment terms could ease pressure on the country’s balance of payments.

Plan to Boost Reserves and Market Access

Pakistan also suggested securitising up to $10 billion in remittances. These funds come from overseas Pakistanis working around the world.
Such a move could increase foreign exchange reserves. It may also lower dependence on expensive international borrowing.
In addition, Islamabad asked for a Saudi guarantee for potential Sukuk bonds. This step could help Pakistan access global markets at cheaper rates.

Other Financial Cooperation Proposals

The government also proposed a concessional credit line for the Export-Import Bank of Pakistan. This institution supports export driven growth. Furthermore, Pakistan asked Saudi authorities to ease bank guarantee requirements for certain imports. Officials also encouraged investment through the Public Investment Fund. Finally, Islamabad requested Saudi support during IMF discussions. Specifically, Pakistan wants flexibility on fiscal targets while implementing tax reforms. If approved, these measures could strengthen economic cooperation between both countries.