Saudi Arabia rolls over Pakistan’s $3 billion loan as finance minister says external accounts are comfortable
Riyadh skyline at dusk (file photo). Saudi Arabia has extended the repayment deadline on its $3 billion facility to Pakistan; this is not a photo of the Senate committee meeting or the finance minister's briefing.
Saudi Arabia has rolled over Pakistan’s $3 billion loan, giving Islamabad more breathing room on a facility that matured at the end of October. Finance Minister Muhammad Aurangzeb confirmed the extension on Wednesday, speaking to reporters at Parliament House after a meeting of the Senate Standing Committee on Finance. The loan, he said, had been extended for a “reasonable period” — though he declined to say exactly how long.
The facility dates back to April this year, when it was arranged to bridge a gap left by $3.5 billion in repayments to the United Arab Emirates. Under its original three-month term it fell due on October 31. Riyadh has now provided $8 billion in short-term financing to Pakistan in all, of which $5 billion had already been extended until December 2028.
Aurangzeb sounded relaxed about the American facility that has not materialised
Asked about the proposed $10 billion US liquidity support facility, Aurangzeb was blunt: Pakistan can manage without it. “If it comes, fantastic. If it doesn’t come, we will, Insha’Allah, continue to work,” he said. Pakistan had sought the facility in July and hoped for approval before the end of September, but Washington has not taken the request forward. The minister added that, with or without the American money, Pakistan’s external accounts are in a comfortable position.
What the Senate committee was told
The Senate panel, chaired by Senator Saleem Mandviwalla, received a detailed briefing on the country’s debt profile from Finance Secretary Imdadullah Bosal. Pakistan’s external financing requirements for the current fiscal year stand at $21.5 billion, including $17.5 billion in principal repayments. Of that, $10.5 billion is expected to be rolled over by bilateral and commercial creditors, leaving net principal and interest payments of $11 billion.
The committee also heard that public debt had fallen to 68.6 percent of GDP by the end of June 2026, down from 75.1 percent in fiscal year 2022-23. The government is targeting a reduction in external debt servicing to $3.5 billion next fiscal year, compared with an estimated $4 billion this year and $4.5 billion last year.
IMF review expected in December
Aurangzeb told the committee that the International Monetary Fund’s executive board is expected to review Pakistan’s $7 billion programme in December. He also pointed to September’s $3 billion Eurobond issue, which drew a $6 billion order book, as evidence that markets remain open to Pakistan. His recent meeting with his Saudi counterpart, Mohammed Al-Jadaan, on the sidelines of the World Bank-IMF meetings in Bangkok, he said, had gone very well.
Note on sourcing: the exact length of the rollover has not been disclosed; reports describing it as a short-term extension are attributed to sources, not stated as an official figure in these posts.
