The Abu Dhabi Fund for Development (ADFD) has rolled over their deposit of $2 billion with the State Bank of Pakistan (SBP), the country's top economic manager announced late Wednesday, a move that would create some much-needed room in the country's cramped fiscal space.
"Abu Dhabi Fund for Development (ADFD) has rolled over their deposit of $2 billion with State Bank of Pakistan, as discussed by prime minister Shehbaz Sharif with His Highness the President of UAE during last week’s official visit to UAE! Long live Pak-UAE friendship!," Finance Minister Ishaq Dar announced in a tweet.
Abu Dhabi Fund for Development (ADFD) has rolled over their deposit of— Ishaq Dar (@MIshaqDar50) January 18, 2023
$2billion with State Bank of Pakistan, as discussed by #PM @CMShehbaz with His Highness the President of UAE during last week’s official visit to ??!
Long live Pak-UAE friendship!
The UAE, on January 12, agreed to lend $1 billion to Pakistan and roll over an existing $2 billion loan, the country's information minister had said, as the country's central bank foreign reserves fell to just three weeks' worth of imports.
The UAE's financial support offered some respite to the country that is still reeling from devastating nationwide floods that have caused more than $30 billion of damage.
The loan announcements came as Pakistan's prime minister, Shehbaz Sharif, kicked off a two-day visit to the United Arab Emirates. "This support will help us tide over economic difficulties," Sharif said in a statement.
He met UAE President Sheikh Mohammed bin Zayed al-Nahyan and was due to discuss business and economic opportunities with other officials and business leaders, Information Minister Marriyum Aurangzeb said.
The International Monetary Fund's ninth review to clear the release of a further $1.1 billion tranche of funds to Pakistan has been pending since September, so external financing is crucial for the country's broken economy.
Foreign exchange reserves held by SBP fell to a critical level of $4.3 billion, the bank said, barely enough for three weeks of imports.
Net foreign exchange reserves held by commercial banks stood at $5.8 billion, and total liquid reserves at $10.1 billion, the bank added.