Riyadh to the Rescue: Saudi Arabia Pledges $3B as Pakistan Faces Looming UAE Debt Deadline

WASHINGTON, D.C. — In a critical move for South Asian financial stability, Saudi Arabia has committed an additional $3 billion in cash deposits to Pakistan’s central bank. The announcement, made by Finance Minister Muhammad Aurangzeb during the World Bank–IMF Spring Meetings, comes just as Islamabad faces a high-pressure deadline to repay a massive multi-billion dollar debt to the United Arab Emirates.

The $3 billion injection is designed to shore up Pakistan’s foreign exchange reserves, which currently stand at approximately $16.4 billion. The timing is vital: Pakistan is set to repay $3.5 billion to the UAE by the end of April following a request for immediate settlement from Abu Dhabi.

Without this Saudi "backstop," the UAE repayment would have consumed nearly 20% of Pakistan’s liquid reserves, potentially jeopardizing its standing within its current $7 billion IMF program.

In addition to the fresh $3 billion, Riyadh has agreed to a significant structural change in its existing support. An older $5 billion deposit—which previously required stressful annual rollovers—has now been extended until 2028.

"This support comes at a critical time for Pakistan's external financing needs and would help reinforce foreign exchange reserves and strengthen the country's external account," Minister Aurangzeb told reporters in Washington on Tuesday.

The financial lifeline highlights the deepening strategic bond between Riyadh and Islamabad. This relationship was further cemented last year by a mutual defense pact, and more recently, by Pakistan's role as a key mediator between the U.S. and Iran.

Analysts suggest that Riyadh’s willingness to bypass annual rollovers signals a high level of confidence in Pakistan’s current economic reform path and its diplomatic efforts to stabilize the Middle East.

Despite the looming UAE deadline, the Pakistan government remains optimistic. The Finance Ministry is targeting a reserve goal of $18 billion (roughly 3.3 months of import cover) by the end of the fiscal year in June.

With the Saudi funds expected to be disbursed within the coming week, Islamabad is now looking to diversify its financing further, with plans for Panda bonds and Eurobond issuances already in the works to ensure long-term debt sustainability.