KARACHI: The Saudi Fund for Development (SFD) on Sunday confirmed the rollover of $3 billion deposits with Pakistan for another one year. The amount was deposited by the SFD for one year in December 2021 under an agreement between SFD and the State Bank of Pakistan (SBP) to build the depleting foreign exchange reserves of Pakistan. Under this deposit agreement, SFD placed a deposit of $3 billion with SBP for one year and it was being matured on December 5, 2022.

However, now on the request of the federal government, the SFD has announced rollover of these deposits for another one year.

“Saudi Fund for Development (SFD) has confirmed rollover of $3 billion deposit maturing on 5th Dec 2022 for one year,” the SBP revealed on its twitter account on Sunday.

According to SBP, these deposits are placed with SBP and are part of its forex reserves. “This reflects the continuing strong and special relationship between KSA and Pakistan,” the SBP added.

Economists said that these deposits will help support Pakistan’s foreign currency reserves and reduce the pressure on external account.

SBP-held foreign exchange reserves decline $176mn to $8.62bn

The government of Pakistan is making efforts to build the depleting foreign exchange reserves of the country and in contact with several international institutions and countries to get financing to avoid the default.

Recently, the IMF has released over $1 billion as a tranche of Extended Fund Facility (EFF). While China has also rolled over some $2.5 billion loan for Pakistan.

It may be mentioned here that on November 26, 2021, a deposit agreement between the Kingdom of Saudi Arabia, represented by the SFD, and the Government of the Islamic Republic of Pakistan, represented by the SBP, was signed by the Chief Executive Officer of SFD, H.E. Sultan Bin Abdul Rahman Al-Marshad and the Governor SBP, Dr Reza Baqir at the State Bank of Pakistan in Karachi to deposit $3.0 billion with SBP as a part of SBP’s foreign exchange reserves.

Copyright Business Recorder, 2022