OMM Newsroom
Saudi Arabia has extended the deadline for Pakistan to repay its $3 billion debt. Pakistan’s Finance Minister Muhammad Aurangzeb announced the extension on Wednesday, Nov. 4.
Aurangzeb told journalists in Islamabad that the deadline had been extended “for a reasonable period,” AnewZ reported. He did not disclose a new due date, linking the decision to the strategic ties between the two countries.
The extension comes as Pakistan faces a shortage of cash. The prospects of a $10 billion financial support facility that the country had hoped to secure from the United States are reportedly weakening.
Pakistan borrowed $3 billion from Saudi Arabia for three months in April to shore up its reserves after the United Arab Emirates demanded immediate repayment of a $3.5 billion loan. The Saudi loan was due to expire in October.
Riyadh had earlier extended until 2028 a separate $5 billion financing facility it had provided to Pakistan.
Aurangzeb said he held a productive meeting with Saudi Finance Minister Mohammed Al-Jadaan in October on the sidelines of the World Bank and International Monetary Fund meetings in Bangkok.
Speaking about the prospects for the $10 billion Exchange Stabilization Support Facility (ESSF) requested from the United States in July, the minister said Pakistan’s main aim was to gain access to international markets.
Pakistan aims to reduce its external debt by $4 billion in the current fiscal year and by a further $3.5 billion in the next fiscal year. The reduction was $4.5 billion in the previous fiscal year.
The country has about $26.86 billion in liquid foreign exchange reserves. The State Bank of Pakistan holds $21.47 billion, while commercial banks hold about $5.41 billion.
