Pakistan Asks Saudi Arabia for $5 Billion Long-Term Deposit and $5 Billion Oil Facility

Pakistan has approached Saudi Arabia with a series of requests to strengthen long-term economic cooperation, including converting $5 billion in existing deposits into a decade-long facility and expanding oil financing on deferred payment terms.

The proposals come as Pakistan grapples with mounting economic pressures following heightened geopolitical tensions in the Middle East and continues negotiations with the International Monetary Fund over the third review of its $7 billion Extended Fund Facility program.

Islamabad has asked Riyadh to convert the $5 billion currently held as short-term deposits with the State Bank of Pakistan into a 10-year long-term arrangement at more favorable pricing, according to a report by a national daily.

Pakistan has also requested Saudi Arabia to increase its oil facility on deferred payment from $1.2 billion to $5 billion, while extending the repayment period from one year to three years for each tranche.

Among other proposals, Pakistan has suggested securitising up to $10 billion in remittances from its overseas diaspora, a move that could help boost foreign exchange reserves and reduce reliance on expensive external borrowing.

The report said Islamabad has also sought a Saudi guarantee for potential international Sukuk issuances, which could allow the country to access global capital markets at lower borrowing costs.

Another request includes a concessional credit line for the Export-Import Bank of Pakistan, which the government established to support export-led growth under its IMF-backed reform program.

Pakistan has further asked Saudi authorities to consider waiving bank guarantee requirements for certain import-related transactions and to explore potential investments through Saudi Arabia’s Public Investment Fund.

Islamabad has also sought Saudi support in discussions related to fiscal targets under the IMF program, particularly adjustments to primary surplus goals to accommodate planned tax rationalisation measures.