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Wednesday, May 22, 2024

UAE ups financial support for Pakistan to $3 billion

UAE President Sheikh Mohamed bin Zayed consented to extend the $2 billion existing loan as well as give Pakistan a further $1 billion loan.

According to Pakistan, the United Arab Emirates has agreed to extend their financial support for Pakistan by $3 billion. This agreement is crucial to bolster Pakistan’s foreign exchange reserves as the South Asian country struggles with an economic crisis.

Following a meeting with Prime Minister Shehbaz Sharif, UAE President Sheikh Mohamed bin Zayed Al Nahyan has decided to offer a $1 billion new loan and roll over a $2 billion current loan, according to a statement released by the Pakistani Prime Minister’s Office on Thursday.

Following Saudi Arabia’s Crown Prince Mohammed bin Salman’s announcement that it was considering raising the amount of deposits in Pakistan’s central bank to $5 billion, the UAE has offered its assistance.

Read More: PM arrives in UAE on a two-day visit  

Pakistan also received offers of more than $10 billion in aid earlier this week as a result of floods that submerged a third of the country and reduced its GDP by half.

Due to a standoff with the International Monetary Fund over tax objectives, disbursement of loan payments was delayed, leaving Pakistan’s economy cash-strapped.

With foreign exchange reserves falling to $5.85 billion, or less than one month’s worth of imports, the nation is experiencing a dollar crisis.

According to the statement, the two countries also decided to expand their investment cooperation and create prospects for investment integration. The UAE has previously declared its intention to invest $1 billion in Pakistani businesses operating in a range of industries.

“His Highness Sheikh Mohamed bin Zayed welcomed Prime Minister Sharif to Abu Dhabi and wished progress and prosperity for Pakistan,” Marriyum Aurangzeb wrote on Twitter.

UAE’s President Zayed also agreed to a state visit to Pakistan at Shehbaz Sharif’s invitation. The dates of the visit will be decided through diplomatic channels.

This is the third visit of PM Shehbaz to the UAE after assuming the office of prime minister in April.