Islamabad-Pakistan has approached Saudi Arabia with a set of proposals aimed at strengthening long-term economic cooperation, including converting existing financial deposits into longer-term facilities and expanding oil financing on deferred payment terms.
The requests come as Islamabad faces growing economic challenges following rising geopolitical tensions in the Middle East and continues negotiations with the International Monetary Fund (IMF) for the third review of its $7 billion Extended Fund Facility (EFF) program.
According to a report published by a national daily, Pakistan has asked Saudi Arabia to convert the $5 billion currently held as short-term deposits with the State Bank of Pakistan into a 10-year long-term facility at more favorable pricing. The move is expected to help ease pressure on Pakistan’s foreign exchange reserves.
Islamabad has also proposed a significant expansion of Saudi oil financing. Pakistan requested that the existing $1.2 billion deferred oil payment facility be increased to $5 billion, while extending the repayment period for each tranche from one year to three years.
In addition, Pakistan has suggested securitising up to $10 billion in remittances sent by overseas Pakistanis. Officials believe the initiative could strengthen foreign exchange reserves and reduce reliance on costly external borrowing.
The government has also sought Saudi guarantees for potential international Sukuk issuances, which could enable Pakistan to raise funds from global capital markets at lower borrowing costs.
Another proposal includes establishing a concessional credit line for the Export-Import Bank of Pakistan, which was recently created to support export-led growth under reforms tied to the IMF programme.
Islamabad has further requested Saudi authorities to consider waiving bank guarantee requirements for certain import-related transactions and to explore investment opportunities through Saudi Arabia’s Public Investment Fund (PIF).
The report added that Pakistan has also sought Riyadh’s support in discussions related to IMF fiscal targets, particularly regarding adjustments to primary surplus goals to accommodate the government’s planned tax rationalisation measures.
The proposals reflect Islamabad’s efforts to secure stronger financial backing from its long-standing strategic partner as it works to stabilise the economy and meet IMF programme requirements.
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