Saudi Arabia on Friday extended the term of a $3 billion deposit it made to Pakistan's foreign reserves, state news agency SPA and Pakistan's central bank said.

Saudi Arabia deposited the money in Pakistan's central bank late last year as a loan to shore up the cash-strapped country's reserves.

The central bank reserves stood at $7.5 billion as of Nov 25 this year.

Too low to cover more than a month of imports, the reserves together with a widening current account deficit have threatened a balance of payment crises for the South Asian economy, which has to make another $1 billion bond payment next week.

"Saudi Fund for Development (SFD) extended the term for the deposit provided by the Kingdom of Saudi Arabia in the amount of 3 billion dollars to the State Bank of Pakistan," the bank said in a statement.

By shoring up the reserves, it added, the money has contributed to meeting external sector challenges and achieve sustainable economic growth for the country.

Pakistan has been in dire need of external financing as it waits for the 9th review of a $7 billion bailout package by the International Monetary Fund (IMF).

Pakistan's finance ministry also approved the signing of a debt rescheduling of $26.150 million with Japan Bank for International Cooperation under G-20 debt servicing initiative to mitigate COVID-19 losses. (Reporting by Alaa Swilam in Cairo and Asif Shahzad in Islamabad; Editing by Alex Richardson, William Maclean)