UAE to let $1 billion rollover for another year

ISLAMABAD: The United Arab Emirates’ (UAE) deposit amount of $1 billion lying with the State Bank is approaching maturity by mid-March 2021 and the Pakistani authorities are expecting the loan to be rolled over for another year, it was learnt.

Earlier, there were reports that the UAE had demanded back $1 billion that would be maturing by mid-March 2021 but senior officials of the Ministry of Finance confirmed on Friday night that “Pakistan and UAE are great friends and we are confident of a rollover.”

Pakistan’s highly-powered officials visited the UAE and convinced their authorities for granting loan rollover keeping in view the economic difficulties faced by Islamabad. Both the countries struck a consensus that the loan rollover would be granted at its maturity. The Kingdom of Saudi Arabia had withdrawn $2 billion deposited in Pakistan provided by China as bridge financing to keep the IMF’s external financing plan intact because the Fund program had envisaged rollover of external loans from the UAE, Saudi Arabia and China for three years period under the IMF programme.

In case of any financing gap, Pakistan will have to present alternate financing plan to keep the IMF program afloat. Pakistan and the IMF had evolved staff level agreement and it is expected that the IMF’s Executive Board would consider revival of the stalled program and release of $500 million after completion of the second to fifth reviews under the Extended Fund Facility. This program got suspended for almost a year after the eruption of COVID-19 pandemic but now it will be revived soon.