Cash-strapped Pakistan to receive $5bn from Saudi, Qatar as debt mounts

Cash-strapped Pakistan is set to receive $5 billion in financial support from Saudi Arabia and Qatar, giving it relief as pressure builds on its external position, a media report said on Sunday.The expected inflows come at a crucial time, as Islamabad prepares to repay $3.5 billion to the United Arab Emirates (UAE) this month while facing strain on its foreign exchange reserves, Dawn reported. The amount had been rolled over since 2018. The repayment is significant because it makes up nearly 18% of the country’s reserves, raising concerns about a sharp drawdown unless fresh inflows arrive on time. According to sources in the finance ministry quoted by the newspaper, the assistance from Saudi Arabia and Qatar is aimed at easing pressure on Pakistan’s weak reserves.The development comes as the country's finance minister Muhammad Aurangzeb is in Washington to attend the IMF-World Bank Spring Meetings and push Pakistan’s economic outreach. Before leaving, Aurangzeb met Saudi finance minister Mohammed bin Abdullah Al-Jadaan in Islamabad.The IMF has said that Pakistan’s three key bilateral creditors Saudi Arabia, China and the UAE, must maintain their deposits with the country until the current three-year programme is completed. However, the report said the UAE may be replaced by Qatar.Without timely inflows from Gulf allies, Pakistan risks falling short of IMF targets. It has long relied on rolling over loans from friendly countries like Saudi Arabia, the UAE and China to avoid default, often replacing old debt with new deposits to keep reserves stable. Pakistan has taken IMF assistance more than 20 times since 1950.