UAE transfers $1bn to bolster Pakistan’s forex reserves

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The United Arab Emirates (UAE) has transferred $1 billion into the State Bank of Pakistan’s (SBP) account.

According to Radio Pakistan, the transfer of $1bn is the first tranche of $3bn aid announced to top up Pakistan’s foreign currency reserves after Prime Minister Imran Khan’s visit to the country.

Last week, the Abu Dhabi Fund for Development (ADFD) said in a statement that it will deposit the amount in the coming days to enhance liquidity and monetary reserves of foreign currency at the SBP.

“The country’s support for Pakistan’s fiscal policy is based on the historical ties between the two nations and the desire to further develop the bilateral cooperation in all fields,” the statement said.

It continued that the ADFD has financed eight development projects in Pakistan with a total value of AED1.5 billion, including AED931 million in grants.

“The funds covered projects in sectors such as energy, health, education and roads,” the statement added.

Following the announcement, Prime Minister Imran thanked the UAE government for supporting Pakistan in its crucial moments.

The ruling Pakistan Tehreek-e-Insaf (PTI) government has also approached China and is in negotiation with the International Monetary Fund (IMF) to seek packages to support the economy.

Finance Minister Asad Umar had also claimed that the country’s foreign exchange reserves have increased by 12.5 per cent after the recent deposits and stand at $15.25 billion while the SBP reserves have reached to $8.86 billion.

it is pertinent to note that the foreign payment from Saudi Arabia came with a 3% interest rate while 3.18% was agreed upon with the UAE government upon return.

“By the time PTI assumed power, Pakistan was facing a balance of payments crisis which has been dealt with. Pakistan, now, is close to conclude an investment deal with its long-time partner China,” Umar said on Thursday. The Chinese deal will help Pakistan bridge the $12 billion gap, required to coup with its present financial requirements and help Pakistan secure a better bailout package from the IMF.