Abdul Ghani

Saudi Arabia has reinforced Pakistan’s external sector with a $5 billion time deposit and disbursements of $200 million under the Saudi Oil Facility during the first two months of FY2025-26, according to the Ministry of Economic Affairs.

The Monthly Disbursement Report for August 2025 available with Wealth Pakistan shows that the Kingdom of Saudi Arabia (KSA) Time Deposit was fully recorded at $5,000 million, while the Saudi Fund for Development (SFD) Oil Facility disbursed $200 million against its annual allocation of $1,000 million in July–August. These inflows form a key part of Pakistan’s non-project assistance.

The $5 billion Saudi time deposit placed with the State Bank of Pakistan is listed in the Ministry’s tables under non-project aid. The report notes that this facility with a full-year budget estimate of $5,000 million has been realized in the opening months. Such deposits are critical in providing liquidity support and strengthening Pakistan’s foreign exchange reserves.

The Saudi Oil Facility is separately highlighted in the report under non-project support. Out of the total allocation of $1 billion, $200 million was disbursed in the first two months. The arrangement allows Pakistan to import petroleum products on deferred payment, thereby reducing the immediate burden on the current account. Together, the Saudi deposit and oil facility accounted for $5.2 billion of the $19.92 billion total inflows recorded in July–August. This makes Saudi Arabia one of the single largest bilateral contributors to Pakistan’s external financing at the start of FY2025-26.

The report shows that both the deposit and oil facility disbursements were in line with the budget estimates (BE) for the year. The KSA Time Deposit had an allocation of $5 billion, which has been fully booked. The SFD Oil Facility, with a BE of $1 billion, has commenced disbursements as scheduled. The Ministry’s tables reflect how Saudi support is intertwined with Pakistan’s fiscal planning. With large-scale deposits and oil financing, Riyadh’s contribution supports not only the budgetary position but also development through stabilizing the balance of payments.

By providing both cash support and commodity financing, Saudi Arabia’s role remains central in Pakistan’s external account management. The Ministry notes that such inflows provide fiscal space and help sustain essential imports, particularly in the energy sector. With these facilities in place, Pakistan entered FY2025-26 with improved reserve buffers, reflecting the close financial cooperation between the two countries.

Credit: INP-WealthPk