UAE rolls over $2bn Pak debt, gives additional $1bn

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Pakistan is required to make over $13 billion external debt repayments from January to June 2023 and the UAE’s decision will lower the needs by less than one-fourth of the total….reports Asian Lite News

The UAE has agreed to provide a $3 billion lifeline to Pakistan in the shape of a rollover of the existing debt and new financing — helping Islamabad avoid defaulting on its loans for a couple of more months.

The development comes as Pakistan faces a daunting challenge to make $13 billion debt repayments in six months, The Express Tribune reported.

Abu Dhabi made the decision to defer the maturing $2 billion and hand over another $1 billion in additional loan to Pakistan during a meeting between Prime Minister Shehbaz Sharif and UAE President Sheikh Mohamed bin Zayed Al Nahyan.

In a tweet late Thursday, Sharif said: “We express our profound gratitude to H.H. President Sheikh @MohamedBinZayed for his decision to roll over $2 billion & provide additional $1 billion. This support will help us tide over economic difficulties. We are deeply touched by kind gesture of our Emirati brothers & sisters.”

The $3 billion lifeline has provided some breathing space to Pakistan, but it has not permanently ended the threat of sovereign default due to huge external debt repayments with less than $4.3 billion reserves in hand, The Express Tribune reported.

Pakistan is required to make over $13 billion external debt repayments from January to June 2023 and the UAE’s decision will lower the needs by less than one-fourth of the total.

The government will have to strive hard for the revival of the International Monetary Fund (IMF) loan programme if it wants the default threat to abate permanently.

Meanwhile, Sharif also met Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, at the Margham Conservation Reserve, where the latter highlighted strong relations between the two nations.

The two leaders explored new opportunities to expand ties in various spheres in ways that will serve the interests of the people of the two nations.

They also discussed the latest regional and global developments and diverse issues of common interest.

Sheikh Mohammed said the historic relations between the UAE and Pakistan provides a strong base for enhancing cooperation.

The Pakistani Prime Minister emphasised his country’s keenness to further strengthen bilateral cooperation.

He also expressed his deep appreciation for the UAE’s development support and the aid that it extended to assist Pakistan in recovering from the devastating floods that hit the country last year.

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