Saudi Arabia rolls over $3 billion in financing for Pakistan — Dawn

Saudi Arabia has rolled over $3 billion in financing for Pakistan, which was due to expire on October 31. Pakistan’s Finance Minister Muhammad Aurangzeb announced this in Islamabad, Dawn reports.

According to the minister, Riyadh provided these funds in April to cover a gap resulting from Pakistan’s $3.5 billion payments to the United Arab Emirates. Aurangzeb did not specify the new term of the financing, calling it “reasonable.” He also noted that Saudi Arabia had previously extended separate $5 billion financing for Pakistan until 2028.

US support

At the same time, the minister lowered expectations regarding the $10 billion Exchange Stabilisation Support Facility requested from the United States in July. He said that Pakistan had primarily sought access to capital markets and had already achieved this by issuing $3 billion in bonds in September. Orders for the bonds totaled $6 billion.

More current news is available on the UA.News Telegram channel Telegram.

Aurangzeb described the potential US facility as additional liquidity support for the state, but said the government would move forward without it as well. Pakistan also plans further issues of eurobonds, panda bonds, and rupee-denominated bonds settled in dollars.

Debt plans

According to the minister, the country’s foreign exchange reserves cover more than three months of imports, and by the end of the year the government expects to raise this indicator to four months through fundraising on capital markets. He also said that the IMF Executive Board is expected to consider disbursing $1.2 billion to Pakistan in December.

The country’s government plans to reduce external debt by $4 billion in the current fiscal year and by another $3.5 billion next year. Muhammad Aurangzeb said Pakistan is seeking to replace expensive short-term borrowing with cheaper financing with longer maturities in order to reduce refinancing risks.