Pakistan has approached Saudi Arabia with a set of proposals aimed at strengthening long-term economic cooperation, including converting $5 billion in Saudi deposits into a 10-year facility and expanding the oil supply arrangement on deferred payment terms. The move comes as government continues negotiations with the IMF and looks for ways to ease pressure on its external finances.
According to officials familiar with the discussions, Pakistan has asked Riyadh to convert the existing $5 billion deposited with the State Bank of Pakistan into a longer-term financial arrangement with favorable pricing. Such a step would help stabilize the country’s foreign exchange reserves and reduce the need for short-term borrowing.
Government has also requested Saudi Arabia to expand its oil facility provided on deferred payment terms. Currently valued at around $1.2 billion, the government wants the facility increased to $5 billion. Officials have also suggested extending the repayment period for each oil tranche from one year to three years, which could provide more breathing space for the country’s balance of payments.
The proposals are part of broader economic discussions between the two countries at a time when Pakistan is dealing with tight fiscal conditions and external financing requirements. The government is currently negotiating the third review of its $7 billion Extended Fund Facility programme with the International Monetary Fund.
Among other ideas presented to Saudi authorities is the securitisation of up to $10 billion in remittances sent by the Pakistani diaspora. Officials believe such a mechanism could help bring additional foreign currency into the country while lowering reliance on costly external borrowing.
Government has also sought a Saudi guarantee for future international Sukuk issuances. If approved, the guarantee could help the country raise funds from global capital markets at relatively lower interest rates.
Another request involves a concessional credit line for the Export-Import Bank of Pakistan. The institution was created to support export-led growth and provide financing for trade, which the government considers essential for strengthening the country’s economic base.
In addition, government has asked Saudi authorities to consider waiving bank guarantee requirements for certain import-related transactions. Officials say the measure could make trade operations smoother and reduce costs for businesses involved in cross-border commerce.
It has also encouraged investment from Saudi Arabia, particularly through the Kingdom’s Public Investment Fund, in sectors ranging from energy to infrastructure and mining.
Officials say these proposals are being discussed within a wider framework of economic cooperation between the two countries. Diplomatic engagement has intensified in recent months, especially as Pakistan seeks stable and long-term financial partnerships with friendly nations.
