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KARACHI: Kingdom of Saudi Arabia (KSA) has extended term for a $3 billion deposit in the State Bank of Pakistan 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 said on Friday.

According to SBP, the extension of the term of the deposit is a continuation of the support provided by the government of the Kingdom of Saudi Arabia to the Islamic Republic of Pakistan, as the deposit aimed to shore up the foreign currency reserves in the Bank and help Pakistan in facing the economic repercussions of the COVID-19 pandemic; it furthermore, contributed to meet external sector challenges and achieve sustainable economic growth for the country.

Pakistan, Saudi Arabia sign $3-billion deposit agreement

The extension of deposits will help to maintained the country’s foreign exchange reserves at a sustainable level. Currently, the total liquid foreign reserves held by the country stood at $13.378 billion as of Nov 25, 2022. This included SBP’s reserves amounted to $7.499 billion.

In addition, to external support the government has also taken a number of measurers to curtail the import to save the precious foreign exchange reserves of the country.

It is worth noting that the $3 billion deposit agreement was signed through the Saudi Fund for Development (SFD) with the State Bank of Pakistan (SBP) in November of last year 2021, after the issuance of the royal directives that reflect the continuation of the close relationship between the two countries.

Copyright Business Recorder, 2022

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