A loan facility from the United Arab Emirates (UAE) will help cash-starved Pakistan bridge its deficit and shore up foreign reserves, Pakistan’s chief government spokesman said today.
The UAE’s crown prince, Sheikh Mohammed Bin Zayed Al Nahyan, visited Islamabad yesterday and confirmed a $3 billion loan package first announced last month.
“The $3 billion package which has already been announced was formalised,” the government’s top spokesman, Information Minister Fawad Chaudhry, told a news conference.
Chaudhry did not give any details about any further assistance through deferred oil payments, which he said late last year the UAE would be extending to Pakistan on top of the loan.
Nor did he give details of the interest rate on the $3 billion loan.
However, Pakistan’s English-language daily Dawn quoted Chaudhry as saying the loan had been given on an interest rate of 2.8 per cent, and that the UAE would be giving another $3.2 billion for the supply of oil on deferred payment.
Pakistan has been facing an economic crisis due to depleting foreign reserves and a widening current account deficit since the government of Prime Minister Imran Khan took office in August.
Pakistan secured a $3 billion loan from Saudi Arabia and a similar amount every year in oil supply on deferred payment for three years.