UAE commits financial support of $1 billion for Pakistan to IMF

The United Arab Emirates (UAE) has committed bilateral financial support of $1 billion for Pakistan, which it confirmed to the International Monetary Fund (IMF). This deal would be crucial for Pakistan to avoid a default, stated Pakistani media. 

Pakistan Finance Minister Ishaq Dar tweeted on Friday: “IMF program — 9th Review Update: UAE authorities have confirmed to IMF for their bilateral support of US $ One billion to Pakistan. State Bank of Pakistan is now engaged for needful documentation for taking the said deposit from UAE authorities. AlhamdoLilah! (sic)”

He also tweeted a little later that Pakistan, that is in the midst of an economic crisis, would receive its last disbursement from China today. “Out of Chinese Bank’s #ICBC approved facility of $1.3 billion (which was earlier repaid by Pakistan), State Bank of Pakistan would receive back third and last disbursement today in its account amounting to $ 300 million. It will shore up forex reserves of Pakistan. AlhamdoLilah!,” he stated. 

ICBC made a payment of $500 million on March 3 and another $500 million on March 17, as per a report in Dawn. 

The report added that the latest developments are expected to lead to the staff-level agreement (SLA) with IMF – that’s already delayed – and unlock multilateral disbursements. Pakistan has been trying to revive the $7 billion bailout programme to secure a $1.1 billion tranche from the IMF. 

The country’s central reserves have depleted to around $4 billion, enough to barely cover a month of imports. 

As per the report, several friendly countries such as Saudi Arabia, China and the UAE had made commitments to financially help Pakistan. The lender wanted external financing commitments fulfilled from friendly countries before releasing bailout funds.

Dar’s announcements come a day after IMF Managing Director Kristalina Georgieva said in Washington that they hoped to complete the IMF's current programme with Pakistan successfully.

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