ISLAMABAD: United Arab Emirates (UAE) ambassador Hamad Obaid Ibrahim Salim Al-Zaabi on Thursday met finance minister Ishaq Dar after the International Monetary Fund (IMF) announced to hold a board meeting before the expiration of a financing program for the South Asian nation at the end of June.
The Pakistani government has continued to remain engaged with the UAE and other friendly countries in recent months since the IMF asked it to secure external financing commitments from other nations to unlock bailout funds.
The global lender has been negotiating with Islamabad since early February to release $1.1 billion of funding held since November which is part of a $6.5 billion loan package agreed in 2019.
The country’s state minister for finance, Aisha Ghaus Pasha, said on Wednesday the government was making sincere efforts to complete the IMF program, though it was cognizant of the overall economic situation and had prepared a contingency plan.
“H.E. Mr. Hamad Obaid Ibrahim Salim Al-Zaabi, Ambassador of the United Arab Emirates called on Finance Minister Senator Mohammad Ishaq Dar, today and exchanged views on further promoting bilateral economic and financial relations between the two countries,” the finance ministry announced in a Twitter post.
The IMF funding is critical for Pakistan to unlock other external financing avenues to avert a default on its obligations. Its diminished central bank reserves barely cover four weeks of imports.
Despite the uncertainty related to the resumption of the IMF program, Pasha said she was hopeful for a staff-level agreement ahead of the next federal budget announcement on June 9.
The UAE is Pakistan’s third-largest trade partner after China and the United States and seen as an ideal export destination for Islamabad due to its geographic proximity which reduces transportation and freight costs and facilitates commercial exchanges.
The UAE has also assisted Pakistan financially in the past with deposits in the State Bank. Pakistan’s primary exports to the UAE include textile products and food items.
