Pakistan seeks conversion of $5bn Saudi deposits into 10-year facility, expansion of $1.2bn oil support to $5bn

Pakistan has sought multiple financial and economic arrangements from Saudi Arabia under ongoing discussions on long-term economic cooperation, including converting existing Saudi deposits of $5 billion into a 10-year facility and expanding the oil supply arrangement on deferred payment terms, The News reported, citing sources. 

Islamabad has submitted eight proposals to Riyadh as part of efforts to strengthen economic cooperation at a time when Pakistan is facing external financing pressures and negotiating the third review of the $7 billion Extended Fund Facility with the International Monetary Fund (IMF).

One of the key proposals involves converting the $5 billion in Saudi deposits currently held with the State Bank of Pakistan into a long-term facility with a tenure of 10 years and favourable pricing.

Pakistan has also requested Saudi Arabia to expand the existing oil facility on deferred payment terms from $1.2 billion to $5 billion. Under the proposal, the repayment period for each tranche could also be extended from one year to three years.

Another proposal involves securitising up to $10 billion in remittances sent by the Pakistani diaspora. Officials said such an arrangement could help boost foreign exchange reserves and reduce reliance on costly external borrowing.

Pakistan has also asked Saudi Arabia to consider providing a guarantee for future international Sukuk issuances, which could help the country access global capital markets at lower borrowing costs.

In addition, Islamabad has requested a concessional credit line for the Export-Import Bank of Pakistan, which was established to support export-led growth and facilitate trade financing.

Another proposal calls for Saudi authorities to consider waiving bank guarantee requirements for import-related transactions with Pakistan to ease trade operations.

Pakistan has also invited Saudi investment, particularly through the Kingdom’s Public Investment Fund (PIF), to explore opportunities in various sectors of the economy.

Officials said Islamabad also sought Saudi support in facilitating adjustments to Pakistan’s primary surplus targets under the IMF programme to accommodate tax rationalisation measures while managing fiscal pressures.

Sources said discussions between the two countries were already underway under a broader economic cooperation framework, and recent geopolitical developments in the Middle East have accelerated these engagements.

The response from Saudi Arabia to the proposals could not be immediately confirmed.