ISLAMABAD: Pakistan has secured financial support of about USD 4 billion from the United Arab Emirates and Saudi Arabia to prevent itself from entering into default amid shrinking foreign exchange reserves, flood damages and an economic slowdown, reported Pakistan-based Dawn newspaper.
According to two separate official announcements, UAE pledged to roll over USD 2 billion debt payable over the next two months and topped this with an additional USD 1 bn support promised during Pakistan Prime Minister Shehbaz Sharif’s visit to the UAE.
An agreement was also signed by the Saudi Fund for Development (SFD) in Pakistan to fund USD 1 billion worth of oil imports on overdue payment. Pakistan central bank’s reserves dropped to USD 4.34 billion on Thursday, the lowest since February 2014.
The reserves are barely enough to finance less than one month of controlled imports. The UAE’s earlier loans of USD 2 billion were scheduled to become due for repayment in February and March, according to Dawn newspaper.
The recent rollover provides Pakistan the opportunity to revive over the next few days, the IMF program and also build back its foreign exchange reserves. (www.timesofindia.com)
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