By Staff Reporter
ISLAMABAD: Pakistan said on Thursday the United Arab Emirates had rolled over $2 billion in deposits with its central bank, providing a boost to foreign reserves as the cash-strapped South Asian nation navigates an International Monetary Fund bailout programme.
Foreign Office spokesman Tahir Andrabi told a briefing in the capital that the rollover had been assured through the efforts of Deputy Prime Minister and Foreign Minister Ishaq Dar, who contacted senior UAE officials this week. “The tenure of the rollover is prerogative of the depositor. But what I can assure you is that through the positive role of the Deputy Prime Minister and Foreign Minister, we can say that the rollover is assured,” Andrabi said. He added that Pakistan faced “no external finance gap.”
Local media reported that the UAE had agreed to the short-term rollover until April 17, 2026, at a rate of 6.5 percent, with formal approval expected soon.
The development comes ahead of Pakistan’s upcoming review talks with the IMF for the third review and the release of the $1 billion fourth tranche under the $7 billion Extended Fund Facility. Earlier, the UAE had rolled over the $2 billion for just one month, with $1 billion maturing on February 16 and the remaining $1 billion on February 22.
The Pakistani government had requested the UAE to roll over the deposit for two years and subsequently submitted a fresh request for extension of the facility. It has been conveyed to the UAE that after the IMF review talks, Islamabad will again approach the authorities to seek a longer-term rollover of the deposits.
In January, the UAE had rolled over $2 billion for one month after the amount matured. A third tranche of $1 billion is due to mature in July 2026. During December, the Ministry of Finance had prepared working papers and drafted a letter to the UAE government seeking rollover of the full $3 billion for one year.
The government had hoped the rollover would be secured in advance, as in previous instances, but the UAE initially agreed to only a one-month extension .Last week, officials from the Ministry of Finance were unable to give a clear assurance to a parliamentary committee regarding the rollover of the full $3 billion deposit, placing responsibility on the Ministry of Foreign Affairs.
The finance minister told the committee that Pakistan has provided the IMF with a clear external financing plan and that talks with the UAE authorities were continuing. He said bilateral arrangements were on track and that any change in the situation would be communicated.
According to officials, the Abu Dhabi Fund for Development has placed $3 billion with the State Bank of Pakistan in three separate tranches. Two tranches of $1 billion each matured on January 17 and January 23 and were rolled over for one month, while the third tranche of $1 billion is due to mature in July and will be taken up for rollover closer to its maturity. In December, Saudi Arabia agreed to extend the maturity of its $3 billion deposit with the State Bank of Pakistan by another year. Under a 2021 agreement, Riyadh had placed $3 billion with Pakistan’s central bank.
For the current fiscal year, Pakistan is seeking rollover of approximately $12 billion in external deposits, including around $9 billion from Saudi Arabia and China — $5 billion from Saudi Arabia and $4 billion from China — in addition to the $3 billion placed by the UAE.
Andrabi said no dates had been set for a visit by Saudi Crown Prince Mohammed bin Salman, though a joint statement from Prime Minister Shehbaz Sharif’s visits to Riyadh last year indicated it would occur this year
Copyright © 2021 Independent Pakistan | All rights reserved
