The United Arab Emirates’ (UAE) deposit of $1 billion lying in State Bank is expected to be matured by mid-March. However, the Government of Pakistan (GOP) is expecting a rollover for another year.
A rollover is when the borrower is unable to pay back to the lender within the agreed period, but instead of entering default, the debt is simply carried over to a new loan for a new period.
A government official told Business Recorder that the amount was due on the 12th of March of the current month.
Senior officials of the Ministry of Finance confirmed on Friday that “Pakistan and UAE are great friends, and we are confident of a rollover.”
Pakistan’s high officials visited the UAE and took the concerned authorities in confidence for granting loan rollover keeping in view the economic difficulties faced by the country.
Reportedly, both countries have reached a consensus that the rollover will be granted at the time of its maturity.
On the 21st of December in 2018, the Crown Prince of Abu Dhabi Sheikh Muhammed bin Zayed bin Sultan Al Nahyan visited Islamabad, pledging USD 3 billion in the State Bank of Pakistan “to support the financial and monetary policy of the country”. However, to date, UAE has deposited $2 billion only.
Similarly, another Gulf country and Pakistan’s long-term ally Saudi Arabia had provided Pakistan with a $3 billion loan in late 2018. Pakistan in December 2020 returned $1 billion to Saudi Arabia with the help of China. However, there is no news of the $1 billion which was due in January of this year.
The Kingdom of Saudi Arabia had withdrawn $2 billion deposited in Pakistan provided by China as bridge financing to keep the IMF’s external financing plan intact because the Fund program had envisaged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 program.