Pakistan, Saudi Arabia to discuss kingdom's $3 billion deposit support

Saudi Arabia and Pakistan will discuss the possibility of supporting the kingdom's $3 billion deposit in Pakistan's central bank by extending its term "or through other options," a joint statement carried out by Saudi state news agency SPA said.

Last year, Saudi Arabia deposited $3 billion in Pakistan's central bank to help support its foreign reserves. 

With a yawning current account deficit and foreign reserves falling to as low as $10.8 billion, the South Asian nation is in dire need of external finances.

Pakistan also welcomed on Sunday a Saudi decision to extend an agreement to finance exports of crude oil products and oil derivatives, SPA reported.

The statement came after a visit by Pakistani Prime Minister Shehbaz Sharif to Saudi Arabia, where he met with Crown Prince Mohammed bin Salman.

READ MORE: Is Pakistan dependent on Saudi oil?

Kashmir

In May 2021, Saudi Arabia and Pakistan signed agreements to improve ties, after months of strained relations between the close allies over the disputed region of Kashmir.

Although the kingdom was the first foreign country Pakistan's former prime minister Imran Khan visited after his 2018 election, Riyadh appeared frustrated with Islamabad earlier in the year.

And while the wealthy nation has supported Pakistan with billions of dollars in aid and loans in recent years, observers say the kingdom is also keen not to upset India, a key business partner and importer of Saudi oil.

READ MORE: Saudi Arabia and Pakistan ink agreements during PM Khan visit