Pakistan has secured $3 billion (€2.54 billion) funding from Saudi Arabia to help shore up its foreign exchange reserves ahead of a major debt repayment to the United Arab Emirates (UAE), officials said.
"We can confirm that Saudi Arabia has agreed to a $3 billion deposit with Pakistan to support their balance of payments," a Saudi Ministry of Finance spokesperson said, according to Reuters.
Why is the timing of the funding important?
The funding comes at a critical time, as Islamabad faces a $3.5 billion repayment to the UAE this month, roughly 18% of its reserves.
Pakistan's finance minister, Muhammad Aurangzeb, said an existing $5 billion Saudi deposit would also be extended for an unspecified period.
The announcement comes just ahead of Pakistani Prime Minister Shehbaz Sharif's visit to Saudi Arabia, along with Qatar and Turkey.
Saudi Finance Minister Mohammed Al-Jadaan was in Pakistan on Friday, Reuters reported, citing sources.
Riyadh, Islamabad cement ties
The two nations have made efforts to deepen economic and security ties over the years.
In 2018, Saudi Arabia unveiled a $6 billion package for Pakistan, while last year Riyadh and Islamabad signed a mutual defense pact treating aggression against either as an attack on both.
Pakistan has emerged as a key player in Middle East diplomacy, acting as a mediator between the United States and Iran while also supporting Saudi Arabia's defense against Iranian missile and drone attacks.
Last week, Islamabad deployed fighter jets and support aircraft to Saudi Arabia following Iranian strikes on critical energy infrastructure.
Pakistan bets on fighter jet exports to boost its economy
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