ISLAMABAD: The United Arab Emirates (UAE) has agreed to roll over $2 billion in deposits placed with the State Bank of Pakistan (SBP) for two months, according to a media report.
As reported by The News International, the assurance came after Pakistan’s Deputy Prime Minister Ishaq Dar contacted senior UAE officials earlier this week. Citing top Pakistani authorities, the report said the rollover has been granted until April 17 at an interest rate of 6.5 percent.
Repayment of the $2 billion UAE deposits had been due in recent weeks, raising concerns over whether the funds would be routinely extended. However, the latest development appears to ease immediate pressure on Pakistan’s foreign exchange reserves.
Pakistan’s external debt profile remains heavily reliant on short-term borrowing and financial support from friendly countries, including the UAE, Saudi Arabia and China, making it vulnerable to geopolitical and rollover risks.
Meanwhile, a mission from the International Monetary Fund (IMF) is expected to arrive in Pakistan later this month for the third review under the ongoing Fund programme.
Earlier, Finance Minister Muhammad Aurangzeb told reporters after a meeting of the Senate Standing Committee on Finance and Revenue that there was no shortfall in external financing. He confirmed that discussions with the UAE regarding the rollover were underway.
When asked whether the UAE had extended the deposit for only one month, the finance secretary dismissed the suggestion, saying it was not the case and termed the question inappropriate.
