Saudi Arabia extends the term of $3 billion deposit in the State Bank of Pakistan

KARACHI, Dec 02 (SABAH): Saudi Arabia has extended the term of three billion dollars deposit in the State Bank of Pakistan through the Saudi Fund for Development to support Pakistan’s economy.

The extension of the deposit period is a continuation of the support provided by the Government of Saudi Arabia to Pakistan.

The purpose of the deposit is to augment the foreign currency reserves in the bank and help Pakistan deal the economic impact caused by COVID-19.

Following the royal directives and reflecting the continuation of close relations between the two countries, the Saudi Fund for Development signed a three billion dollars deposit agreement with the State Bank of Pakistan in November last year.

The rollover of the deposits has helped the Pakistani rupee as it closed unchanged at Rs 223.69 against the US dollar on a day-to-day basis in the interbank market on Friday.

The news was later confirmed by the SBP which termed the extension provided by the Saudi Fund for Development (SFD) “a continuation of support provided by the KSA.”

“The deposit aimed to shore up the foreign currency reserves in SBP and help Pakistan in facing the economic repercussions of the Covid-19 pandemic,” the statement added.

“It, furthermore, contributed to meeting external sector challenges and achieving sustainable economic growth for the country,” it continued.

“It is worth noting that the $3 billion deposit agreement was signed through the SFD with the SBP in November 2021, after the issuance of the royal directives that reflect the continuation of the close relationship between the two countries,” the central bank said.

The rollover of the deposits has reduced the size of total foreign debt repayment and debt serving to $23.3 billion over the next 12 months i.e. November 2022 to October 2023.

The SBP had reported earlier this week that the country was scheduled to repay a total of $26.3 billion on accounts of foreign debt and debt services over the next 12 months.