KARACHI: Pakistan is set to receive $4.1 billion in financial assistance from friendly countries next week, according to Finance Minister Asad Umar.
The minister’s disclosure came at a seminar organised on Saturday by the Pakistan Business Council.
Giving a break-up of the expected inflow, Umar said the United Arab Emirates (UAE) would soon deposit $2 billion into the State Bank of Pakistan (SBP) foreign currency reserves.
The remaining part of $2.1 billion would come from China, he added.
“The UAE is providing the loan at an interest rate of 3%, while the Chinese have offered us an interest rate of 2.5%,” Umar said .
With the receipt of the soft loans, SBP reserves would surge to around $12 billion and total reserves, including ones available at commercial banks, would stand at approximately $19 billion by the end of next week.
The imminent inflow was also confirmed by SBP spokesperson Abid Qamar in a talk with The Express Tribune. “The SBP expects to receive the funds shortly. Shortly means the deposits may even come in one day or over the next couple of days.”
In December 2018, the UAE had announced a $6 billion friendly assistance package for Pakistan, including $3 billion in cash deposits in SBP’s reserves and a credit line of another $3 billion for the supply of petroleum oil on deferred payment.
Abu Dhabi released the first tranche of $1 billion in January 2019.
“The agreement for the placement of second tranche of $2 billion by the Abu Dhabi Fund for Development (ADFD) with the State Bank of Pakistan has been signed between the two sides – the SBP and ADFD,” the central bank reported.
The UAE offered exactly the same bailout package that Saudi Arabia first announced in October 2018 to shore up Pakistan’s foreign currency reserves.
Riyadh had already deposited $3 billion in cash in three equal monthly tranches by January 2019. The two countries have also decided the modalities for supply of oil on credit from the current month of March.
Apart from the Middle Eastern states, Pakistan’s “all-weather friend” China has also given Islamabad over $2 billion in recent months.
In July last year, China deposited $2 billion with the SBP and cemented its place as Pakistan’s single largest saviour in times of economic crisis over the past five years.
(This news/article originally appeared in The Express Tribune on March 11th, 2019)