New Delhi, November 12, 2026 (Yes Punjab News)
Saudi Arabia has repeatedly provided financial support to cash-strapped Pakistan to prevent a balance-of-payments crisis, with the assistance reportedly linked to Islamabad’s military commitments and diplomatic backing for Riyadh, according to a report published by India Narrative.
The report describes Saudi financial assistance not merely as lending but as a strategic arrangement under which Riyadh secures security support and diplomatic alignment, while Pakistan gains temporary relief without addressing its deeper economic weaknesses.
On November 4, Pakistan’s Finance Minister confirmed that Saudi Arabia had extended the tenure of its $3 billion deposit, which matured on October 31. The development came a day before Turkey’s Parliament ratified a defence pact linking Saudi Arabia, Pakistan and Ankara.
The report contrasts Riyadh’s support with the United Arab Emirates’ decision in April to seek repayment of $3.45 billion in deposits after years of annual rollovers. Pakistan’s State Bank reserves stood at $16.38 billion on March 27, meaning repayment would have removed around 21 per cent of the reserves. The report says Saudi Arabia subsequently provided Pakistan with a total of $8 billion in two instalments, offering substantial relief.
It also points to Pakistan’s military presence in Saudi Arabia, noting that Pakistani personnel have served in the kingdom since 1967. The report says around 8,000 troops, a fighter squadron and air defence support were deployed in 2026.
The report notes that Pakistan’s dependence extends beyond Saudi Arabia. China, its largest single creditor, reportedly rolls over deposits annually at an interest rate of around 6.1 per cent, while the International Monetary Fund’s programme relies partly on continued support from bilateral partners.
The UAE’s decision to recall its deposits, despite an earlier commitment under the IMF programme to keep them until September 2027, highlighted the risks of relying on discretionary Gulf financing. The Financial Times reportedly linked Abu Dhabi’s irritation to Pakistan’s ties with Riyadh and its mediation efforts involving Iran, an interpretation Islamabad described as routine.
Pakistan’s public debt rose from PKR 49.3 trillion in June 2022 to PKR 86.7 trillion in June 2026, an increase of 75.9 per cent, according to the report. Its exports also declined from 10.6 per cent of GDP in FY2022 to 10 per cent in FY2025, trailing Bangladesh and Sri Lanka.
FOLLOW NOW
