Pakistan gets $2 billion from UAE, with $1-billion additional loan in pipeline
1 min read . Updated: 19 Jan 2023, 09:05 AM IST
PremiumUAE President Sheikh Mohammed bin Zayed al-Nahyan promised to grant a $1-billion extra loan in addition to rolling over the existing $2-billion loan.
On January 19, the Abu Dhabi Fund for Development (ADFD) extended its $2-billion deposit with the State Bank of Pakistan (SBP). Prime Minister Shehbaz Sharif spoke with UAE President Sheikh Mohammed bin Zayed al-Nahyan about the rollover during his recent visit to Pakistan, according to Pakistan's Finance Minister Ishaq Dar.
The UAE president promised to grant a $1-billion extra loan in addition to rolling over the existing $2-billion loan, according to Geo News. The financial assistance from the UAE gave some solace to Pakistan, which is still recovering from devastating countrywide floods that have cost more than $30 billion in damage.
The SBP currently possesses $4.5 billion dollars in foreign exchange reserves, equal to three weeks' worth of import bills at the central bank. SBP's foreign exchange holdings dropped to a crucial $4.3 billion level, barely enough for three weeks' worth of imports, according to the bank.
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External finance is essential for Pakistan's faltering economy because the ninth review of the International Monetary Fund (IMF) to approve the transfer of a fresh $1.1-billion tranche of money to Pakistan has been on hold since September. According to the bank, commercial banks held net foreign exchange reserves of $5.8 billion and total liquid reserves of $10.1 billion.
Sharif claimed in September 2022 that even allies regarded Pakistan as a country continuously requesting financial assistance. Before the floods, according to Sharif, Pakistan's economy was already in peril. He claimed that things had become even more challenging after the flood. When Pakistani officials visit any friendly country or speak over telephone, people think Pakistan is there to beg for money, he added.
According to Sharif, Pakistan was purportedly on the verge of default when he took office in April 2022, but the coalition government's efforts stopped it and were able to at least partially control the economic turbulence.
(With ANI inputs)
