Saudi Arabia has once again rolled over a $3 billion short-term loan to Pakistan. Finance Minister Muhammad Aurangzeb told reporters at Parliament House on Wednesday, after a meeting of the Senate Standing Committee on Finance, that repayment had been extended for a "reasonable period", though he did not specify how long.
The loan had matured in October. "It has been rolled over. You don't need to worry," the minister said, adding that given the strategic relationship between Pakistan and Saudi Arabia, the length of the extension was not an issue. According to sources, the debt was extended for a shorter period this time.
Aurangzeb said Pakistan no longer needed further financial assistance from the kingdom, with foreign exchange reserves at $21.5 billion, enough for three months of imports. The government and the State Bank aim to raise that cover to four months by the end of the fiscal year.
Comfortable without a US facility
The minister said Pakistan had requested a $10 billion liquidity support facility from the United States in July, when it was seeking market access. In the first week of September, he said, Pakistan raised $3 billion against an order book of $6 billion. "If it comes, fantastic. If it doesn't come, we will continue to work," he said, adding that Pakistan would rely on Eurobonds, Panda bonds and dollar-settled rupee-linked bonds instead.
Pakistan owes $10.5 billion to bilateral and commercial creditors this fiscal year and depends heavily on rollovers. Saudi Arabia's short-term deposits total $8 billion, of which repayment of $5 billion has already been deferred until December 2028.