Pakistan has secured an extension of Saudi Arabia’s $3 billion financial support, while prospects of obtaining a proposed $10 billion US Exchange Stabilisation Support Facility (ESSF) appear to have weakened, Finance Minister Muhammad Aurangzeb said on Wednesday.
Speaking to journalists at Parliament House, the finance minister confirmed that Riyadh had extended the $3 billion financing facility originally provided in April to help Pakistan meet its repayment obligations of $3.5 billion to the United Arab Emirates (UAE).
The facility, which was due to mature on October 31 after a three-month term, has now been extended for a longer period.
“It has been extended and for a reasonable period. You don’t need to worry as to for how long given the kind of strategic relationship we have,” Aurangzeb said.
He added that he had held a productive meeting with his Saudi counterpart, Mohammed Al-Jadaan, on the sidelines of the recent World Bank-International Monetary Fund (IMF) meetings in Bangkok. Saudi Arabia had also extended its separate $5 billion deposit facility until 2028.
The minister ruled out seeking additional financial assistance from Riyadh, saying Pakistan’s foreign exchange reserves were sufficient to cover more than three months of imports. He expressed confidence that the reserves would provide four months of import cover by the end of the year through capital market financing.
Commenting on the proposed $10 billion US Exchange Stabilisation Support Facility, which Pakistan had requested in July, Aurangzeb indicated that the government was no longer relying heavily on the arrangement.
He said Pakistan’s original objective was to regain access to international capital markets, a target that had already been achieved through the issuance of a $3 billion bond in September, which attracted orders worth $6 billion.
“If that (ESSF) materialises, fantastic, it will be a liquidity support facility. Otherwise, we have plans for further Eurobond issuance, Panda bond issuance and rupee-linked dollar-settled bond,” he said.
Aurangzeb said he had held discussions with 70 to 80 institutional investors during his visit to Bangkok, adding that investors had shown interest in Pakistan’s five-year and 10-year financing options.
He said the government was also looking at broader financial cooperation with the United States, particularly through the US Export-Import Bank and the Development Finance Corporation (DFC), which could support American investors and exporters operating in Pakistan.
The minister described such investment and credit arrangements as more substantial forms of financing, adding that Pakistan would continue its economic plans regardless of whether the proposed US liquidity facility materialised.
He also announced that the IMF Executive Board was expected to meet in December to approve a $1.2 billion disbursement to Pakistan.
Earlier, while briefing the Senate Standing Committee on Finance, Aurangzeb said the government was targeting a $4 billion reduction in external debt during the current fiscal year, followed by a further $3.5 billion decrease next year. This compares with a reduction of $4.5 billion recorded in the previous fiscal year.
He said the government was working to replace costly short-term borrowing with longer-term financing through bonds and private placements to minimise refinancing risks.
According to the minister, Pakistan’s external debt had increased by around $5 billion to $6 billion annually, rising from $45 billion in fiscal year 2014-15 to approximately $100 billion. However, the annual increase had slowed to nearly $1 billion over the past two years.
Aurangzeb maintained that recent Eurobond and Panda bond issuances, along with private placements, were intended to replace expensive financing with more affordable alternatives rather than increase the country’s external debt.
He attributed the improvement in economic indicators to fiscal discipline, which had helped contain the fiscal and current account deficits. Despite higher oil and wheat import costs, he projected that the current account deficit would remain below 1 per cent of GDP during the current fiscal year.
The minister described the country’s economic stability as hard-earned, saying it had helped build financial buffers despite challenges posed by floods and regional conflict.
He added that foreign exchange reserves had crossed $21.5 billion, marking the highest level in Pakistan’s history.
Finance Secretary Imdadullah Bosal informed the committee that public debt had declined to 68.6 per cent of GDP by the end of June 2026, compared with 75.1 per cent in fiscal year 2022-23.
He said the year-on-year growth in public debt had slowed to 7.7 per cent during the previous fiscal year, the lowest rate in two decades.
According to the finance secretary, domestic debt stood at Rs58.8 trillion at the end of August 2026, down from Rs68.4 trillion at the end of June, while external debt remained stable at $98.2 billion.
He further informed the committee that Pakistan’s net external financing requirements stood at $11 billion after rollovers and refinancing. Of this amount, $5 billion had already been repaid during the first four months of the current fiscal year, while the remaining $6 billion was due over the next seven months.
The Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, also expressed serious concern over difficulties faced by parliamentarians in obtaining foreign currency for personal travel.
Committee members criticised the treatment of lawmakers by banks and the State Bank of Pakistan (SBP), describing the existing procedures as unacceptable.
Mandviwalla directed the central bank to review its requirements, particularly the clearance procedures for politically exposed persons (PEPs) and the mandatory physical appearance of parliamentarians before exchange companies.
He said lawmakers should not be subjected to such requirements after submitting valid passports, travel tickets and visas.
The committee also expressed dissatisfaction with the SBP’s response, dated October 30, 2026, to a letter sent by the committee secretary on its behalf to the central bank governor. Members objected to the matter being addressed by a deputy director-level official rather than a senior authority.
The committee chairman termed the requirement for parliamentarians to appear personally before exchange companies humiliating and called for an immediate review of the procedures. He warned that the committee would take serious notice if the issue remained unresolved.
