Home / International/ Pakistan says UAE’s financial assistance to shore up economy

Pakistan says UAE’s financial assistance to shore up economy


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 8 January 2019 00:00

Facebook

A trader counts Pakistani rupee notes at a currency exchange booth in Peshawar, Pakistan - Reuters

ISLAMABAD (Reuters): A loan facility from the United Arab Emirates (UAE) will help cash-starved Pakistan bridge a yawning current account deficit and shore up foreign reserves, Pakistan’s chief government spokesman said on Monday.

The UAE’s crown prince, Sheikh Mohammed bin Zayed Al Nahyan, visited Islamabad on Sunday and confirmed a $3 billion loan package first announced last month.

“The $3 billion package which has already been announced was formalised,” the government’s top spokesman, Information Minister Fawad Chaudhry, told a news conference.

Chaudhry did not give any details about any further assistance through deferred oil payments, which he said late last year the UAE would be extending to Pakistan on top of the loan.

Nor did he give details of the interest rate on the $3 billion loan.

However, Pakistan’s English-language daily Dawn quoted Chaudhry as saying the loan had been given on an interest rate of 2.8%, and that the UAE would be giving another $3.2 billion for the supply of oil on deferred payment.

Pakistan has been facing an economic crisis due to depleting foreign reserves and a widening current account deficit since the government of Prime Minister Imran Khan took office in August.

Khan, who has been critical of foreign loans throughout his political career, had no option but to seek financial support from friendly countries besides approaching the International Monetary Fund (IMF) for a bailout.

Pakistan secured a $3 billion loan from Saudi Arabia and a similar amount every year in oil supply on deferred payment for three years.

Pakistan has also been trying to get loans from neighbouring China, which has pledged nearly $60 billion for energy and road and rail infrastructure projects as part of the Belt and Road Initiative (BRI), known as China Pakistan Economic Corridor (CPEC).

Last week, in response to a Financial Times report that China had agreed to lend Pakistan $2 billion to bolster foreign exchange reserves, Foreign Ministry spokesman Lu Kang said China would continue to provide support to Pakistan “in the form of aid, trade, investment and in other ways”.

After several rounds of talks late last year, discussions with the IMF broke for unexplained reasons, although Pakistan said it was already taking most of the steps the IMF required, including steps to bridge the budget deficit, more revenue collection and devaluation of the rupee.

Pakistan expects the talks to resume this month.


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Implementing SC Orders

Wednesday, 26 June 2019

The Supreme Court on 18 April has ordered six Ministries, their Secretaries and three Government authorities to take immediate several effective measures to be enforced in the design and construction of all parts of new buildings and services the pub


Need for an education revolution: Future of our kids and the nation is at risk – Part I

Wednesday, 26 June 2019

It is said that a country is only good as her people. A country belongs to her people. In a democratic country, people elect the leaders to manage the country on their behalf. Hence, to be hailed as a progressive country, it is paramount for a countr


Universalism versus tribalism

Wednesday, 26 June 2019

The most venerable Warakagoda Sri Gnanarathana Thero Mahanayake of the Asgiriya chapter has announced that his recent remarks, have been misconstrued and distorted. The authenticity of recorded information in cyber space is an inconvenient truth of t


A sermon on stoning

Tuesday, 25 June 2019

It is generally assumed we have passed the Stone Age, the Bronze Age, the Iron Age, the Industrial Age, and the Space Age.After a breath-taking dive in to the Digital Age, we are well on our way to the Age of Automation and Artificial Intelligence. N


Columnists More