SFD signs agreement to extend $3 billion deposit with SBP

The Saudi Fund for Development (SFD) on Friday signed an agreement with the State Bank of Pakistan (SBP) to extend the maturity of its $3 billion deposit, Radio Pakistan reported.

“The agreement, signed between the Saudi Fund for Development (SFD) and the State Bank of Pakistan (SBP), provides for the extension of the maturity of a $3 billion deposit placed by the SFD with the State Bank of Pakistan,” according to X post.

The agreement was signed by Sultan bin Abdulrahman Al-Marshad, Chief Executive Officer (CEO) of the SFD, and SBP Governor Jameel Ahmad on behalf of the SBP.

Finance Minister Muhammad Aurangzeb attended the signing ceremony of a major financial agreement in Washington, DC, in the presence of Pakistan’s Ambassador to the United States, on the sidelines of the 2026 Spring Meetings of the World Bank and IMF.

According to the X Post Ministry, the extension highlights the long-standing and strong economic partnership between Pakistan and the Kingdom of Saudi Arabia. It is expected to support the stability of the country’s external sector.

Pakistan received a $2 billion financial influx from Saudi Arabia yesterday, providing timely relief to its foreign exchange reserves just as the country prepares to repay $3.5 billion to the United Arab Emirates (UAE) this month.

Read: SBP receives $2 billion Saudi credit

The SBP verified receipt of funds from the Saudi Ministry of Finance, while the Finance Ministry said the aid was part of a broader $3 billion financial commitment from Riyadh aimed at stabilizing Pakistan’s reserves.

Additionally, Saudi Arabia ensured the renewal of its existing deposits of $5 billion for an extended period, removing the earlier requirement for annual renewal.

Officials said the support would significantly ease pressure on reserves, especially in light of the UAE’s large repayment, which accounts for nearly 18% of Pakistan’s official foreign exchange holdings.

The influx comes at a critical time as Pakistan struggles to meet its external financing needs and maintain its reserve targets under its IMF program.

According to Finance Ministry sources, the government aims to increase reserves to around $18 billion, equivalent to around 3.3 months of import cover, in the coming months.

Meanwhile, Islamabad has finalized arrangements to gradually repay $3 billion to the UAE.

Of this amount, $2 billion is expected to be paid on April 17, followed by the remaining $1 billion on April 23.

Separately, Pakistan has already repaid a long-standing loan of $450 million owed to the UAE.

On Wednesday, FinMin said Saudi Arabia had committed $3 billion in additional deposits, with disbursement expected in the coming week. He further said that the existing Saudi deposit of $5 billion would no longer remain subject to the previous annual rollover agreement and would instead be extended for a longer period.

Additional IMF loan

Government sources said The Express PK Press Club that it was decided to seek an additional loan from the IMF under the existing program and that there was a good chance that the IMF would honor Pakistan’s request.

The IMF chief said her organization was expecting funding requests of $50 billion from member countries to deal with the shocks of the war in the Middle East.

Learn more: Saudi largesse fills Pakistan’s sudden reserves deficit

The sources said the IMF executive directors were also urging the Fund’s management to either increase existing programs or open new financing windows. They added that it may not be possible to seek a new financing facility from the IMF, but the existing program can be supplemented with additional loans.

Pakistan can avail up to 600% of its IMF quota and so far it has exhausted 350% of the total quota. The sources said there was a window of $2-2.5 billion available, which Pakistan wanted to use to manage the effects of the war in the Middle East.

The sources said Pakistan was eligible to benefit from additional IMF financing to deal with war shocks. They said there was a very high chance that the IMF would agree to Pakistan’s request to increase the loan amount.

Providing a loan to Pakistan to deal with the aftermath of the war would not be a favor but would help the country tide over the crisis, the sources said.

With 600% quota, Pakistan can avail a total loan of $16 billion and has exhausted $9.5 billion. This constitutes a strong argument for an increase under the existing Extended Financing Facility (EFF) programme.