The United Arab Emirates on Thursday agreed to loan Pakistan $1 billion and rollover an existing $2 billion loan, Pakistan’s information minister said, offering respite to a nation still reeling from devastating floods. .
Pakistan says it suffered more than $30 billion in damage as floodwaters swept across the country from July to August.
The loan announcements came as Pakistani Prime Minister Shehbaz Sharif began a two-day visit to the United Arab Emirates.
He met with UAE President Sheikh Mohammed bin Zayed al-Nahyan and was expected to discuss business and economic opportunities with other officials and business leaders, Information Minister Marriyum Aurangzeb said.
“We share a determination and understanding that continued efforts must be made to further strengthen trade, investment and economic relations,” Sharif said in a statement from his office.
While a ninth review by the International Monetary Fund (IMF) to authorize the release of Pakistan’s next $1.1 billion tranche of funds has been pending since September, external financing is crucial for the country’s shattered economy. country.
Pakistan’s central bank foreign exchange reserves fell to a critical $5.5 billion in the week ending Dec. 30, barely enough for three weeks of imports.
The IMF and Pakistan signed a $6 billion bailout package in 2019, which was topped up with another $1 billion earlier this year.
The lender wants Pakistan to take fiscal measures to meet fiscal targets, introduce reforms in the power and energy sectors and revise subsidies to the agriculture and export sectors.
IMF officials met Pakistani Finance Minister Ishaq Dar on Monday on the sidelines of a climate conference in Geneva that announced pledges of more than $9 billion for flood recovery.
Dar said on Wednesday that Pakistan was already working on the emergency fiscal plan to reduce energy sector debt and review subsidies.
Long-time ally Saudi Arabia also plans to invest $10 billion
in the South Asian nation of 220 million and increasing its deposits at the country’s central bank from $3 billion to $5 billion.
Pakistan says it suffered more than $30 billion in damage as floodwaters swept across the country from July to August.
The loan announcements came as Pakistani Prime Minister Shehbaz Sharif began a two-day visit to the United Arab Emirates.
He met with UAE President Sheikh Mohammed bin Zayed al-Nahyan and was expected to discuss business and economic opportunities with other officials and business leaders, Information Minister Marriyum Aurangzeb said.
“We share a determination and understanding that continued efforts must be made to further strengthen trade, investment and economic relations,” Sharif said in a statement from his office.
While a ninth review by the International Monetary Fund (IMF) to authorize the release of Pakistan’s next $1.1 billion tranche of funds has been pending since September, external financing is crucial for the country’s shattered economy. country.
Pakistan’s central bank foreign exchange reserves fell to a critical $5.5 billion in the week ending Dec. 30, barely enough for three weeks of imports.
The IMF and Pakistan signed a $6 billion bailout package in 2019, which was topped up with another $1 billion earlier this year.
The lender wants Pakistan to take fiscal measures to meet fiscal targets, introduce reforms in the power and energy sectors and revise subsidies to the agriculture and export sectors.
IMF officials met Pakistani Finance Minister Ishaq Dar on Monday on the sidelines of a climate conference in Geneva that announced pledges of more than $9 billion for flood recovery.
Dar said on Wednesday that Pakistan was already working on the emergency fiscal plan to reduce energy sector debt and review subsidies.
Long-time ally Saudi Arabia also plans to invest $10 billion
in the South Asian nation of 220 million and increasing its deposits at the country’s central bank from $3 billion to $5 billion.
