Pakistan receives second tranche of $1b from UAE — SBP

KARACHI: Pakistan has received another $1 billion out of a $3 billion package pledged by the UAE last year to help bring a gaping current account deficit under control, the country’s central bank said, adding that the final tranche of $1 billion would be deposited within days. 
On Tuesday, the Abu Dhabi Fund for Development (ADFD) deposited $1 billion with the State Bank of Pakistan (SBP). Another $1 billion was received from the Fund in January. The UAE deposits are aimed at supporting Pakistan’s monetary policy. 
“We have received $1 billion and hopefully will get the remaining $1 billion within the next couple of days,” Abid Qamar, the spokesman for the central bank, told Arab News.
The deposits come as Islamabad remains engaged in bailout talks with the International Monetary Fund.
In October, Saudi Arabia said it would loan Pakistan $6 billion, including a $3 billion deposit for its foreign currency reserves and another $3 billion in deferred oil payments. China, Pakistan’s staunchest ally and financial benefactor, has also pledged to help but has not announced the size of the assistance package yet.
In January this year, Mohammed Saif Al Suwaidi, Director General of ADFD, and Tariq Bajwa, Governor of the SBP, signed an agreement with ADFD for a $3 billion (AED11 billion) deposit into the central bank of Pakistan. The decision was taken under the directives of UAE President, Sheikh Khalifa bin Zayed Al Nahyan, and Crown Prince of Abu Dhabi, Sheikh Mohamed bin Zayed Al Nahyan.
Islamabad believes the inflows from the UAE will help improve its foreign exchange reserves, which stood at $8.11 billion on March 01, 2019. Pakistan is also hoping the United Arab Emirates will, like Saudi Arabia, offer further financial support through deferred oil payments. 
“Saudi and UAE help has averted the country’s default,” financial expert Muzzamil Aslam said. “The country was able to secure loans at cheaper rates, average 3.2 percent, as compared to commercial markets where the rates are 7-8 percent.”