Dubai: The United Arab Emirates is expected to deposit US$2 billion (Dh7.35 billion) in the State Bank of Pakistan (SBP) as foreign currency reserves in a few days to help Islamabad meet international payment pressures.
“US$2 billion in deposits are expected to be received by the SBP within days,” a spokesperson of the SBP told media in Pakistan.
Abu Dhabi had released the first tranche of $1 billion (Dh3.67 billion) as a cash deposit out of the pledged $3 billion in January 2019.
The Abu Dhabi Fund for Development, ADFD, formalised in January a $3 billion (Dh11 billion) deposit into the State Bank of Pakistan to support the country achieve long-term objectives of its monetary policy.
The deposits from the UAE are coming at a very critical time as Islamabad is all set to make a large external debt payment next month, even as its reserves have remained under pressure.
With financial support from friendly countries and through a shift in the government’s economic policies, the SBP’s foreign currency reserves have remained stable at over $8 billion since late January.
The reserves have either slightly moved up or slightly gone down, unlike a rapid decline as seen in the past two years.
The reserves stood at $8.11 billion as of March 1, 2019, the SBP reported.
Earlier, the increased international payment pressure had pushed Pakistan’s foreign currency reserves to almost five-year lows at $6.63 billion, on January 18, 2019.
In an earlier statement, Mohammad Saif Al Suwaidi, Director General of ADFD said: "The directive to deposit $3 billion with the State Bank of Pakistan aligns with the UAE leadership’s keenness to bolster Pakistan’s economy, help its government achieve financial stability and overcome economic challenges, and drive comprehensive development in the country.”
Last year, Saudi Arabia also deposited $3 billion into State Bank of Pakistan and pledged to provide $3.2billion oil-deferred payment over the next three years. Pakistan, facing its worst economic crisis, is also in talks with the IMF for a loan of US$15 billion.