Finance Minister Ishaq Dar confirmed on Wednesday that the Abu Dhabi Fund for Development (ADFD) has rolled over a $2 billion deposit that was due in two months to the State Bank of Pakistan (SBP).
“Abu Dhabi Fund for Development (ADFD) has rolled over their deposit of $2 billion with State Bank of Pakistan, as discussed by [PM Shehbaz Sharif] with His Highness the President of UAE during last week’s official visit,” he stated in a late-night tweet.
“Long live Pakistan-UAE friendship!”
During Prime Minister Shehbaz’s visit to Pakistan last week, the United Arab Emirates had agreed to roll over the $2 billion loan they already had and provide Pakistan with an additional $1 billion loan.
The earlier $2 billion loan from the UAE was supposed to be paid back in February and March.
The SBP’s reserves fell to a critical level of $4.34 billion, the lowest level since February 2014 and insufficient to finance controlled imports for less than a month.
Pakistan has been experiencing a severe cash shortage as a result of rapid declines in its reserves over the past few months, raising concerns about default. Months have passed since the completion of the ninth review of an International Monetary Fund (IMF) program, which would result in the release of $1.18 billion.
The UAE’s rollover now gives the government a chance to restart the IMF program in the coming days, gradually restore foreign exchange reserves, and lift import restrictions that have crippled the manufacturing sector and caused a shortage of essentials.
