UAE confirms to IMF support of $1b for Pakistan

UAE confirms to IMF support of $1b for Pakistan: Dar

Says country gets $300m out of $1.3b loan from China bank

ISLAMABAD:  Finance Minister Ishaq Dar said on Friday that the United Arab Emirates has confirmed its commitment to the International Monetary Fund (IMF) for its bilateral financial support of $1 billion to Pakistan.

“UAE authorities have confirmed to IMF for their bilateral support of US $1 billion to Pakistan,” Dar said in a tweet on Friday.

He added that the State Bank of Pakistan (SBP) was now “engaged for needful documentation for taking the said deposit from UAE authorities”.

Separately, Dar announced that the SBP would also receive Friday the third and last disbursement from the Industrial and Commercial Bank of China (ICBC) worth $300 million, out of its $1.3bn loan.

In a tweet, he said: “Out of Chinese bank’s ICBC approved facility of $1.3bn (which was earlier repaid by Pakistan), State Bank of Pakistan would receive back third and last disbursement today in its account amounting to $300mn.”

On March 3, the ICBC had approved a rollover of a $1.3bn loan for Pakistan and made the first payment of $500m the same day. The second one — also worth $500m — was made on March 17.

Friday’s development is expected to lead to the much-delayed staff-level agreement (SLA) with the Fund and unlock multilateral disbursements. Since early February, Pakistan has been negotiating with the IMF to revive the $7bn bailout programme to secure a $1.1bn tranche.

With central bank reserves falling to critical levels, hovering around $4bn and barely able to cover a month of imports, the IMF tranche is critical for the country as it will also unlock other external financing avenues, helping Pakistan avert a default on its obligations.

Dar’s predecessor Miftah Ismail has said that UAE’s assurance to the IMF “paves the way for a staff-level agreement with the Fund”.

“Hopefully, board approval will follow in four weeks. This will reduce our default risk and demand for dollars (for capital flight),” he added.

Meanwhile, a day earlier, IMF said that it hoped to complete its current programme with Pakistan successfully. Agencies