Pakistan was expected to repay its $1 billion loan to the United Arab Emirates this month, with the loan maturity date set for Friday, March 13. However, in a recent development, the UAE has given a positive response to Prime Minister Imran Khan, stating that there is no need to immediately return the loan payment. In what comes as a sigh of relief for the Pakistani government, the country’s finance ministry earlier expressed it was confident that the UAE would rollover the $1 billion loan, snubbing previous reports that mentioned Dubai had reportedly withdrawn the financial support.
The $1 billion loan was part of the $6.2 billion initial bailout that the UAE had announced in late 2018, helping the government of PM Khan to avoid default on international debt obligations. “Pakistan and the UAE are great friends and we are confident of a rollover,” The Express Tribune quoted Finance Secretary Kamran Ali Afzal as saying, while responding to a query whether the UAE extended $1 billion support for one more year. UAE’s immense support is proof of strengthening ties between the two countries and its fruitful contribution towards the development of Pakistan’s economy.
A senior ministry official said that the money was not going back and the UAE had informed Pakistan that it would rollover the $1 billion. Out of the promised $6.2 billion, the UAE disbursed $2 billion. It did not make the $3.2 billion oil financing facility and also withheld last $1 billion cash disbursements. The UAE has already rolled over $1 billion deposit for another year, which matured in January this year. The financial assistance packages announced by Saudi Arabia and the UAE assisted Pakistan in buying time to negotiate a deal with the International Monetary Fund (IMF). But the implementation of the IMF deal is also stalled for the last 13 months but is earmarked to be revived in the fourth week of this month.