UAE approves USD 2 billion funding to cash-strapped Pakistan

The financing plan included loans worth USD 2.9 billion from the World Bank.With the current foreign reserves standing at a mere USD 4.3 billion, Pakistan may not be able to reach June without support from foreign creditors.

Pakistan on Thursday announced that the UAE has rolled over its deposits of USD 2 billion, providing critical support to the cash-strapped country's depleting foreign exchange reserves.

The confirmation came days after Prime Minister Shehbaz Sharif visited the oil-rich Gulf country seeking help to improve the balance of payments.

Finance Minister Ishaq Dar confirmed on social media that the Dhabi Fund for Development (ADFD) had deposited USD 2 billion with the State Bank of Pakistan (SBP).

"Abu Dhabi Fund for Development (ADFD) has rolled over their deposit of USD 2 billion with the State Bank of Pakistan as discussed by PM Shehbaz Sharif with His Highness the President of UAE during last week's official visit. Long live Pak-UAE friendship!" he tweeted on Wednesday night.

The United Arab Emirates last week announced to provide a USD 3 billion lifeline to Pakistan in the shape of a rollover of the existing USD 2 billion debt and another USD 1 billion in new financing.

Pakistan has been tethering on the edge of default with just about USD 4 billion of reserves while facing the daunting task to make USD 13 billion in debt repayments in six months.

Apart from the UAE, Saudi Arabia also provided support of USD 5 billion in critical times to Pakistan. But it is not sufficient to meet the shortfall unless the country wins the support of the International Monetary Fund (IMF).

The fund last August revived a stalled USD 6 billion loan programme but has refused to release any more funds unless its tough conditions are fulfilled by Islamabad.

Meanwhile, the World Bank on Thursday said several media reports suggesting that the lender had delayed the approval of two loans worth USD 1.1 billion until the next fiscal year were ''unfounded''.

The Washington-based lender's Country Director for Pakistan, Najy Benhassine said: "The press reports that refer to a World Bank decision to delay approval of potential bank operations in Pakistan are unfounded.'' Behassine made it clear that all the dates for the approval of loans were already scheduled.

For the current fiscal year, the government had hoped to receive USD 30 billion to USD 32 billion in foreign financing but the plans appear unrealistic. The financing plan included loans worth USD 2.9 billion from the World Bank.

With the current foreign reserves standing at a mere USD 4.3 billion, Pakistan may not be able to reach June without support from foreign creditors.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)