Islamabad, Pakistan – Web Desk: Pakistan’s Finance Minister Muhammad Aurangzeb said the government faces no difficulty in securing a rollover of a $2 billion loan from the United Arab Emirates, adding that discussions with Emirati authorities are ongoing.
Speaking to reporters after a meeting of the National Assembly’s Standing Committee on Finance, Aurangzeb said Pakistan’s external financing gap had been fully bridged and there was no ambiguity regarding foreign funding requirements. He noted that these needs had already been discussed at the outset of the country’s programme with the International Monetary Fund (IMF), and would be reviewed again in upcoming negotiations.
Under Pakistan’s $7 billion IMF programme, the UAE, Saudi Arabia, and China have committed to maintaining deposits totaling $12.5 billion with the State Bank of Pakistan until September. However, sources said the UAE had most recently extended the $2 billion facility for only one month, with no formal announcement yet on a longer-term rollover.
In December, the Governor of the State Bank had requested the UAE to roll over $2.5 billion in loans for two years and reduce the interest rate from 6.5% to 3%, according to officials familiar with the discussions. Sources added that during the last extension in January, Emirati authorities indicated it could be the final rollover.
Deputy Prime Minister Ishaq Dar has previously said that the UAE is also in talks regarding the potential acquisition of $1 billion worth of shares in a military foundation entity.
Pakistan is currently engaged in negotiations with the IMF under a $7 billion Extended Fund Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility (RSF). If talks progress positively, approval of two loan tranches totaling $1.2 billion by the IMF Executive Board could follow.
An IMF mission has arrived in Karachi to review the performance of the State Bank of Pakistan, including net international reserves, net domestic assets and swap positions.
Aurangzeb said Pakistan was entering the IMF discussions from a position of strength, adding that talks in the coming days would focus on economic performance and forward strategy.
