Islamabad (Web Desk): Saudi Arabia has provided Pakistan with a significant financial boost by rolling over a $5 billion loan and extending its repayment period by an additional three years, according to informed sources.
The development is being viewed as a major relief for Pakistan, which continues to face external financing challenges and pressure on its foreign exchange reserves.
Sources said the Saudi government approved the rollover of the loan, allowing Pakistan to defer repayment and easing its immediate external financial obligations.
The loan was originally extended to help Pakistan meet its international payment commitments, particularly those linked to the United Arab Emirates (UAE).
It had initially been provided for a short-term period of three months, with repayment due upon maturity.
However, in a strong show of financial support, Saudi Arabia has now renewed the facility and significantly extended the repayment deadline by three years.
Financial experts say the decision will help reduce immediate pressure on Pakistan's foreign exchange reserves by preventing a large outflow of dollars in the near term.
The extension is also expected to give the government greater flexibility in managing its external debt repayments and balancing its foreign financing requirements.
Analysts believe the rollover will strengthen investor confidence, support macroeconomic stability, and provide the government with additional fiscal space as it continues efforts to stabilize the economy.
The move is also expected to improve Pakistan's external account management by reducing short-term repayment risks while allowing authorities to focus on broader economic reforms and growth initiatives.
The latest extension reflects Saudi Arabia's continued financial backing of Pakistan during a period of economic challenges and underscores the longstanding economic and strategic ties between the two countries.