The Abu Dhabi Fund for Development (ADFD) has rolled over a $2 billion with the State Bank of Pakistan (SBP) that was to be repaid over the next two months, Finance Minister Ishaq Dar announced on Wednesday.
“Abu Dhabi Fund for Development (ADFD) has rolled over their deposit of $2 billion with State Bank of Pakistan, as discussed by P.M. Shehbaz Sharif with His Highness the President of U.A.E. during last week’s official visit to U.A.E.!” he wrote in a posting on Twitter. “Long live Pak-U.A.E. friendship!” he added.
Prime Minister Shehbaz Sharif and several members of his cabinet undertook an official visit to the U.A.E. last week, with Information Minister Marriyum Aurangzeb announcing that the Gulf state had agreed to roll over the deposit and provide a fresh $1 billion loan in financial support for Pakistan. The decision was seen as a mild reprieve, as the country’s foreign exchange reserves have declined to less than $4.5 billion, barely sufficient to cover three weeks of imports. Pakistan is also attempting to revive a stalled bailout program with the International Monetary Fund (IMF), which economic experts stress is vital to avoid default.
The IMF’s ninth review, pending since September, has yet to be initiated, with the global lender demanding Islamabad undertake promised reforms, which the government expects to unleash a new wave of inflation. Its revival would release a tranche of $1.18 billion, without which Pakistan would struggled to rebuild its foreign exchange reserves or end import restrictions that have created shortages of essential commodities, including food and medicine.