The United Arab Emirates has come to Pakistan’s rescue to bail it out of its economic crisis. The UAE’s crown prince, Sheikh Mohammed bin Zayed Al Nahyan, who visited Islamabad on Sunday, confirmed that a $3 billion loan package would be granted to Pakistan. The loan package which was first announced in December 2018, has now turned into a formal agreement between the two nations.
In a media conference, Pakistan’s Information Minister Fawad Chaudhry made the news public. He said, “The $3 billion packages which have already been announced was formalized.”
Pakistan’s chief government spokesperson told the media that this loan facility from UAE is believed to draw out Pakistan from its current account deficit and help the nation revive its economy by building up its foreign reserves.
During its meeting with the Arab peninsular nation last month Pakistan asked for deferring payments for oil supplies.
The Information Minister did not reveal any details if the Arab nation has agreed to any further assistance through deferred oil payments, nor did he give details about the interest rate that would be charged on the $3 billion loans.
However, Pakistan’s English-language daily Dawn reported the details of the loan interest rate as given by Fawad Chaudhry. According to it, the loan had been given on an interest rate of 2.8 percent. It also mentioned that the UAE would be giving another $3.2 billion for the supply of oil on deferred payment.
Pakistan has been going through a financial crisis due to its increasing current account deficit and decreasing foreign reserves. It is said that the nation became economically weak since the government of Prime Minister Imran Khan took office in August.
Besides UAE, last month Islamabad engaged in pecuniary talks with International Monetary Fund (IMF) and also approached its allies China and Saudi Arabia to strengthen its otherwise cash-deprived economy.
Last week, China agreed to lend $2 billion to Pakistan. China’s Foreign Ministry spokesman Lu Kang said China would continue to provide support to Pakistan “in the form of aid, trade, investment and in other ways”.
Whereas in the case of IMF the talks did not reach a successful conclusion for unexplained reasons. Although Pakistan claimed that it had fulfilled all the IMF requirements, including steps to bridge the budget deficit, more revenue collection, and devaluation of the rupee. The nation expects the talks to resume early this year.