Pakistan has approached the Kingdom of Saudi Arabia (KSA) with eight key requests aimed at strengthening its economy, boosting foreign exchange reserves, and easing fiscal pressures. The requests were made in the backdrop of rising geopolitical tensions due to the ongoing US-Israel-led war against Iran, which has put additional strain on Pakistan’s financial stability.
Key Requests to Saudi Arabia
- Conversion of Existing Deposits into Long-Term Facility
Pakistan has requested that the $5 billion short-term deposit held by the State Bank of Pakistan (SBP) with Saudi Arabia be converted into a 10-year long-term facility with favorable pricing. - Increase in Oil Facility
The country is seeking to enhance the deferred oil payment facility from $1.2 billion to $5 billion, while also extending the repayment period from one year to three years, allowing for more manageable installment schedules. - Securitisation of Diaspora Remittances
Pakistan has proposed the securitisation of $10 billion in remittances from the Pakistani diaspora. This mechanism would help boost foreign exchange reserves and reduce reliance on costly external borrowing. - Guarantee for International Sukuk Issuance
Saudi Arabia is requested to provide guarantees for Pakistan’s new Sukuk issuances, enabling the country to raise international capital at lower interest rates. - Concessional Credit Line to EXIM Bank
Islamabad seeks a concessional line of credit to the EXIM Bank of Pakistan, recently established to promote export-led growth under the IMF programme. - Waiver of Bank Guarantee Requirements
Pakistan has asked for waivers on bank guarantees for import-related transactions to ease trade financing. - Investment in Public Investment Fund (PIF)
The Kingdom is encouraged to explore investment opportunities in Pakistan through its Public Investment Fund, aiming to bring long-term capital into strategic sectors. - Adjustments in Primary Surplus Targets
Assistance is requested to modify primary surplus targets under the IMF programme, enabling tax rationalisation without further fiscal strain.
Context and Strategic Importance
Pakistan is also negotiating with the International Monetary Fund (IMF) for the third review of its $7 billion Extended Fund Facility (EFF). The eight requests to Saudi Arabia are intended to stabilize forex reserves, manage fiscal deficit pressures, and support oil imports in a volatile global energy market.
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Official responses from Saudi authorities were not immediately available, and Pakistani officials have not commented publicly on the status of these requests.
This move reflects Pakistan’s ongoing efforts to diversify financial support and safeguard the economy amid regional geopolitical tensions and rising global oil prices.
