In a critical boost for Pakistan’s economy, Saudi Arabia has extended a $3 billion deposit for another year. This extension, facilitated by the Saudi Fund for Development (SFD), aims to bolster Pakistan’s dwindling foreign exchange reserves and strengthen its financial stability. Originally agreed upon in 2021, the rollover reflects the close economic and diplomatic ties between the two nations.
The financial support comes at a crucial time for Pakistan, which is grappling with significant external debt repayment obligations and a challenging economic environment. The extended deposit will not only support reserve maintenance but also assist Pakistan in meeting its gross financing needs, estimated at $25 billion for the fiscal year 2023-24.
Additionally, the rollover is expected to pave the way for international confidence, including the approval of IMF tranches crucial for ongoing economic reforms.
Economic analysts have emphasized the importance of such initiatives, highlighting their role in stabilizing the country’s currency and facilitating investor confidence amidst challenging conditions
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