UAE aid to shore up Pakistan economy

islamabad — A loan facility from the United Arab Emirates will help Pakistan bridge a yawning current account deficit and shore up foreign reserves, Information Minister Fawad Chaudhry said on Monday.

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, 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,” 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,Dawn quoted Chaudhry as saying the loan had been given on an interest rate of 2.8 per cent, 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.

The $3 billion package which has already been announced was formalised

Fawad Chaudhry, Information Minister