KARACHI:Pakistan on Monday moved one step closer to receive the $3 billion deposit from Saudi Arabia as the two countries signed a deposit agreement to pave way for receipt of the financial assistance.

According to a statement released by the State Bank of Pakistan on Monday, the agreement was signed between Saudi Fund for Development (SFD) Chief Executive Officer Sultan Bin Abdul Rahman Al-Marshad and State Bank of Pakistan (SBP) Governor Dr Reza Baqir.

Under the deposit deal, Saudi Fund for Development would park $3 billion in the State Bank of Pakistan.

“The deposit amount shall become part of central bank’s foreign exchange reserves,” it said. “It will help support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the Covid-19 pandemic.”

According to the SBP, the deposit agreement reflects the strong and special relationship between the Kingdom of Saudi Arabia and Pakistan and it is expected to further augment the economic ties between the two brotherly countries.

On October 27, Saudi Arabia agreed to provide $3 billion to Pakistan in the shape of cash assistance along with $1.2 oil facility on deferred payment.

It is the second financial assistance package that the kingdom has extended to Pakistan in the past three years, aiming to help the country manage a brewing external sector crisis. The kingdom had extended a similar package valuing at $6 billion in October 2018 to provide a breathing space to Pakistan before the country went to the International Monetary Fund for an extended loan facility.