In a significant development for Pakistan's economic landscape, the United Arab Emirates (UAE) has officially announced the extension of two loans, totaling $2 billion, placed with the State Bank of Pakistan (SBP) for an additional year.
These loans, each amounting to $1 billion, were set to mature in January 2024, prompting Pakistan to approach the UAE for an extension.
The confirmation of the rollover comes as a relief for Pakistan, providing a crucial injection of funds to bolster its foreign exchange reserves. As of now, the UAE maintains a substantial deposit of $3 billion with the SBP, underlining the strong financial ties between the two nations.
UAE has confirmed rollover of its two deposits of US$1.0 billion each placed with State Bank of Pakistan for another one year which were maturing in January 2024.#SBP
— SBP (@StateBank_Pak) January 17, 2024
The negotiations for the loan extension began on January 9, when Pakistan formally requested the UAE to consider prolonging the maturity date for the $2 billion loan. The successful outcome of these talks showcases the cooperative relationship between the two countries and reflects the UAE's confidence in Pakistan's commitment to economic stability.
At present, Pakistan's foreign exchange reserves are positioned at approximately $8.15 billion, a figure crucial for maintaining a robust and resilient economy. The extension of the $2 billion loans from the UAE further contributes to enhancing the country's financial standing.
In an additional boost to Pakistan's monetary reserves, the SBP has confirmed the receipt of the second installment of SDR 528 million, equivalent to $705.6 million, from the International Monetary Fund (IMF). This disbursement, expected to be reflected in the SBP reserves by January 19, 2024, adds another layer of financial support, strengthening Pakistan's economic position.
