Just ahead of the International Monetary Fund’s visit to Pakistan, the United Arab Emirates has rolled over a $2 billion loan to Islamabad for another two months, providing crucial support to the country’s external financing position.
The development comes as Pakistan prepares for the IMF’s third economic review under its $7 billion loan program.
According to officials from the Ministry of Finance, the UAE has extended the $2 billion deposit until April 16 and 22.
Previously, the UAE had rolled over the same amount for only one month, with that extension set to expire on February 16 and 22.
Pakistan is scheduled to repay $2 billion to the UAE in April this year and an additional $1 billion in July.
Govt sought longer extension
Finance Ministry officials said the government had originally requested a two-year rollover from the UAE to ensure financial stability.
After the initial request, Islamabad again asked Abu Dhabi to roll over the $2 billion to help make the upcoming IMF economic review successful.
The UAE will receive an annual interest rate of 6.5% on the rolled-over loan.
IMF mission arriving this month
An IMF delegation is expected to arrive in Pakistan in the last week of this month for the third economic review under the $7 billion Extended Fund Facility program.
Officials say financing arrangements under the IMF program have been completed, and rollover arrangements with friendly countries will continue.
If negotiations conclude successfully, Pakistan will receive the next installment of $1 billion from the IMF.
External financing assurances
During the review talks, Pakistan will assure the IMF that its external financing arrangements are in place. The government is keen to complete the rollover process smoothly to strengthen its position during negotiations.
Officials added that Islamabad will hold further discussions with the UAE after the third economic review to address future financial arrangements.
The latest rollover provides short-term breathing space for Pakistan’s economy, as the government works to secure continued IMF support and maintain financial stability.
