Pakistan is seeking $4.2 billion from Saudi Arabia as its foreign exchange reserves have fallen sharply, broadcaster ARY News reported on Thursday, citing sources.

Pakistan's Finance Ministry did not immediately respond to a Reuters request for comment.

The development comes as the South Asian country faces dwindling foreign exchange reserves. According to the weekly report, foreign exchange reserves held by the State Bank of Pakistan (SBP) clocked in at $7.5 billion.

Forex reserve levels attract PM’s attention

Earlier, Dr Ali Awadh Asseri, former ambassador of Saudi Arabia to Pakistan, had said Riyadh is committed to averting Islamabad’s current economic crisis worsened by the recent floods and to the $20 billion investment in refinery, petrochemical complex, mining and renewable energy projects in the country.

“The Saudi leadership is committed to $20 billion dollars investment in refinery, petrochemical complex, mining and renewable energy projects in Pakistan. But there is also tremendous scope for Saudi public and private investment in other sectors such as textiles, sports, leather goods and surgical equipment,” Dr Asseri said.

Last week, Kingdom of Saudi Arabia (KSA) extended term for a $3 billion deposit in the SBP to support the Pakistani economy.

The Saudi Fund for Development (SFD) in September confirmed the rollover of $3 billion deposit 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 to build the depleting foreign exchange reserves of Pakistan.

“In implementation of the directives of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud - may Allah protect him; the Saudi Fund for Development (SFD) extended the term for the deposit provided by the Kingdom of Saudi Arabia in the amount of 3 billion dollars to the State Bank of Pakistan,” the SBP had said then.