Saudi Arabia extends $3b deposit agreement with Pakistan for another year

The extension until December 2025 follows recent talks between PM Shehbaz Sharif and Saudi Crown Prince Salman

The Saudi Fund for Development (SFD), representing the Kingdom of Saudi Arabia, has extended the term of a $3 billion deposit with Pakistan for another year, the State Bank of Pakistan (SBP) announced on Thursday.

The extension, set to keep the deposit maturing on December 5 in place until December 2025, follows discussions between Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammad Bin Salman during his recent visit to Riyadh on the sidelines of the 'One Water Summit'.

According to a statement from the SBP, the Saudi Fund’s move reflects the continued financial support of Saudi Arabia to Pakistan, contributing to the strengthening of Pakistan’s foreign exchange reserves and supporting the country’s economic growth.

The $3 billion deposit was initially arranged in 2021 under a formal agreement with SFD. It was rolled over in 2022 and 2023, further highlighting the ongoing and strong relationship between the two countries.

In addition to the deposit extension, Pakistan and Saudi Arabia have been deepening their economic ties where in October, the two nations signed memorandums of understanding (MoUs) worth $2 billion to enhance bilateral trade and investment.

The agreements, finalised during a visit by a high-level Saudi delegation, include investments in agriculture, technology, and infrastructure, along with the development of manufacturing facilities in both nations.

The agreements cover a broad range of sectors, from a $70 million investment in agriculture to the establishment of advanced semiconductor chip manufacturing in Saudi Arabia.

They also involve the development of textile industries, a white oil pipeline project, hybrid power projects, and cybersecurity measures.

Further, Pakistan will export spices and vegetables to Saudi Arabia, and both countries will collaborate on the development of surgical and dental equipment manufacturing facilities.