Dubai/Islamabad | The UAE on Friday said it will soon give USD 3 billion to cash-strapped Pakistan to bolster its foreign exchange reserves and the government’s fiscal policies.
The UAE government’s announcement came as Pakistan is negotiating a USD 8 billion bailout package from the International Monetary Fund (IMF) to overcome a severe balance-of-payments crisis that threatens to cripple the country’s economy.
The transfer of 11 billion dirhams (USD 3 billion) by the government-owned Abu Dhabi Fund for Development (ADFD) to State Bank of Pakistan is expected to be carried out in the “coming days”, the official WAM news agency reported.
In Islamabad, Prime Minister Imran Khan Friday thanked the UAE government after it announced to provide USD 3 billion to bolster Pakistan’s foreign reserves.
Khan who made two trips to the UAE since taking office in August took to Twitter to express gratitude to the friendly country.
“I want to thank the UAE govt for supporting Pakistan so generously in our testing times. This reflects our commitment and friendship that has remained steadfast over the years,” he said.
The UAE’s announcement of the financial support to Pakistan comes a week after its Finance Minister Asad Umar said that soon there will be an incoming investment package from the country’s close ally Saudi Arabia that would be “the biggest foreign investment” in Pakistan’s history.
The UAE’S support for Pakistan’s fiscal policy is based on the historical ties between the two people and the two friendly countries and the desire to further develop the bilateral cooperation in all fields, the WAM report said.
Pakistan’s all weather ally China has also pledged to provide a generous aid to Islamabad to overcome its financial woes. Beijing has not yet revealed the quantum of its financial support.
Prime Minister Khan has said Chinese President Xi Jinping has asked him not to reveal the amount.
Saudi Arabia has also announced that it will provide Pakistan USD 3 billion in balance of payment support and additionally give oil worth USD 3 billion on deferred payment after Prime Minister Khan met Saudi King Salman in Riyadh in October.
The Trump administration is making all efforts to ensure that any IMF loan to Pakistan is not used to repay its Chinese debt.
The US feels that the huge Chinese debt is responsible for Pakistan’s economic challenges.
“We are working and making clear within the IMF that if it were going to supply any funding to Pakistan that it would not be used to repay Chinese loans,” David Malpass, Under Secretary of Treasury for International Affairs, told lawmakers during a recent Congressional hearing.
There are concerns among American lawmakers that the Pakistan may use the IMF money to repay the Chinese debts.
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