Pakistan secures $4 billion in financial support from UAE and Saudi Arabia

ISLAMABAD: Pakistan has secured about $4 billion in financial support from the United Arab Emirates and Saudi Arabia to avoid defaulting amid dwindling foreign exchange reserves, damage from floods and economic downturn, Pakistani newspaper Dawn reported.
According to two separate official announcements, the UAE has pledged to refinance the $2 billion debt payable over the next two months and complemented this with additional support of $1 billion pledged during the visit of Pakistani Prime Minister Shehbaz. Sharif in the UAE.
An agreement has also been signed by the Saudi Fund for Development (SFD) in Pakistan to finance $1 billion in overdue oil imports.
Pakistan’s central bank reserves fell to $4.34 billion on Thursday, the lowest since February 2014. Reserves are barely enough to fund less than a month of controlled imports.
According to the Dawn newspaper, the UAE’s previous loans of $2 billion were due to be repaid in February and March.
The recent refinancing offers Pakistan the opportunity to relaunch the IMF program over the next few days and also to rebuild its foreign exchange reserves. Pakistan’s strict import controls have hurt the country’s manufacturing sector and also created a shortage of essential items.
Al Arabiya post recently reported that Pakistan, facing a gigantic economic crisis, is reeling from inflationary pressure and a shortage of even basic commodities like food and medicine and its economy is sustained. afloat thanks to the financial assistance of the international community.
The generous response from the international community in pledging more than $8 billion is a great relief to cash-strapped Pakistan struggling to rebuild in a climate-resilient way after devastating floods that killed 1,739 people and affected 33 million people last year.
At the opening session of the ‘International Conference on Pakistan’s Climate Resilience’ in Geneva, co-hosted by UN Secretary-General Antonio Guterres and Pakistani Prime Minister Shehbaz Sharif, he called for $8 billion in aid dollars to international donors over the next three years. years old on January 9.
The breakdown of committed assistance shows that the Islamic Development Bank made the largest contribution of $4.2 billion, followed by the World Bank ($2 billion), the Asian Development Bank ($1.5 billion million), France ($345 million), China and USAID contribute $100 million each, the European Union ($93 million) and Japan ($77 million). A total of $8.75 billion has been pledged so far, Al Arabiya Post reported.
However, many analysts say the floods are a recent event and the economic crisis cannot be attributed to this natural disaster alone, as Pakistan has been mismanaging its economy for a long time.

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