The State Bank of Pakistan (SBP) announced on Friday that Saudi Arabia has extended its term for a $3 billion deposit in the central bank through the Saudi Fund for Development (SFD) in support of the country’s economy.

According to a press release, the decision was an implementation of King Salman bin Abdulaziz Al Saud’s royal directives.

In November last year, the SBP had signed an agreement with the SFD to receive $3bn, which would be placed in the central bank’s account with an aim to improve its foreign exchange reserves.

The SBP’s statement today added that the extension in the term “contributed to meet external sector challenges and achieve sustainable economic growth for the country.”

“The extension of the term of the deposit is a continuation of the support provided by the Saudi Arabian government to the Islamic Republic of Pakistan,” the statement concluded. “The deposit aimed to shore up the foreign currency reserves in the SBP and help Pakistan in facing the economic repercussions of the Covid-19 pandemic.”

In September, the SFD had confirmed the rollover of a $3bn deposit for one more year. The deposit was set to mature on December 5.

In the last week of October 2021, Saudi Arabia had agreed to revive its financial support to Pakistan, including about $3bn in safe deposits and $1.2bn worth of oil supplies on deferred payments.

The agreement was reached during the visit of former prime minister Imran Khan to the kingdom the same month.

Extension to help Pakistan’s economy: PM Shehbaz

Prime Minister Shehbaz Sharif has welcomed the extension, saying that it would help improve Pakistan’s economic situation.

“Pakistan’s economic self-reliance is the first national agenda for which political stability and a balanced economy are the need of the hour,” he said in a statement issued on Friday.

The premier thanked the Saudi government and Prince Abdulaziz Bin Salman. “We deeply appreciate the love Prince Salman has for Pakistan.”

PM Shehbaz went on to say that the kingdom had, once again, played the role of an “elder brother”.

Finance Minister Ishaq Dar also announced the extension on Twitter, ending it with “Long live Pak-Saudi friendship!”