UAE extends its $2 billion credit to Pakistan. Dar
The UAE has promised to give Pakistan a $3 billion lifeline in the form of a rollover of existing loans and new financing.
The Abu Dhabi Fund for Development (ADFD) has rolled over their $2 billion deposit with the State Bank of Pakistan, according to Finance Minister Ishaq Dar on Thursday (SBP).
On his official Twitter account, the finance minister tweeted the announcement.
The $2 billion deposit made by the Abu Dhabi Fund for Development (ADFD) with the State Bank of Pakistan has been rolled over, as was negotiated by Prime Minister Shehbaz Sharif with His Highness the President of the UAE during their official visit last week. “Long live Pakistan-UAE friendship!” Observe the tweet.
The United Arab Emirates (UAE) agreed last week to give Pakistan a $3 billion lifeline in the form of a rollover of its current debt and new finance, preventing Islamabad from going into default on its obligations for a few more months.
The development occurs as the nation struggles to repay $13 billion in debt in only six months.
During a meeting between Prime Minister Shehbaz Sharif and UAE President Sheikh Mohamed bin Zayed Al Nahyan, the Gulf state decided to postpone the maturing $2 billion and give another $1 billion in additional loan to Pakistan, according to the PM’s Office.
The $3 billion lifeline has given Pakistan some breathing room, but it hasn’t completely eliminated the prospect of a sovereign default caused by massive debt repayments with only $4.3 billion in available reserves.
Between January and June 2023, Pakistan must repay more than $13 billion in foreign debt; the UAE’s decision will only reduce this amount by about one-fourth.
If the government wants the fear of default to end permanently, it must work hard to revive the International Monetary Fund (IMF) loan program.
