UAE deposits $1bn in SBP, says Ishaq Dar
Business
Deposit to increase Pakistan's forex reserves
ISLAMABAD (Dunya News) – Finance Minister Ishaq Dar on Wednesday said the United Arab Emirates had deposited $1billion with the State Bank of Pakistan.
These funds are crucial for securing the IMF deal as the global lender had conditioned the release of loan with the deposition of funds by countries including the UAE, Saudi Arabia, and China. Saudi Arabia has already credited $2 billion into the SBP's account.
Addressing the presser, Dar said this deposit would improve the SBP’s forex reserves, adding that he was thankful to the UAE’s government on behalf of Prime Minister Shehbaz Sharif and Chief of Army Staff Gen Asim Munir. “Pakistan will restore its image in the world,” he vowed.
Earlier, Prime Minister Shehbaz Sharif said he was optimistic that the International Monetary Fund will approve a $3 billion bailout at its board meeting on Wednesday.
Pakistan and the Fund reached a staff level agreement last month, securing much-needed funding for the cash-starved country.
The agreement needs the board's approval before disbursing $1.1 billion upfront and the rest of the money in instalments.
"The meeting is happening today," Sharif said at an event in Islamabad. "I hope the board will approve the programme. This programme will help Pakistan's economy to stabilise."
The nine-month short-term lifeline for Pakistan's ailing economy, which has been on the cusp of default, came after eight months of tough negotiations over fiscal discipline.
The $350 billion South Asian economy faced a crippling balance of payments crisis, with its central bank's reserves barely enough to cover a month of controlled imports.
The IMF board approval will also unlock other bilateral and multilateral external financing for Pakistan.
Beijing rolled over $5 billion of Pakistan's loan in the last three months, which Sharif said he believed played a major role in averting the debt default.
Saudi Arabia deposited $2 billion in support funds with the central bank on Tuesday. Dar added that the inflows from the UAE and Saudi Arabia would be reflected in the country's reserve data that will be released on Thursday.
Fitch credit rating agency on Monday upgraded Pakistan's sovereign rating to CCC from CCC-, and the bailout has brought relief to investors in the country's stocks and bonds.
