Pakistan gets US$1 billion boost from UAE ahead of key IMF decision

ISLAMABAD: Pakistan’s state bank coffers were further boosted Wednesday by a US$1 billion deposit from the United Arab Emirates, officials said, ahead of a key International Monetary Fund (IMF) board meeting to approve new funding.

The deposit comes a day after Saudi Arabia transferred US$2 billion to Islamabad, and brings the state’s foreign reserves to US$7.5 billion – more than double last week’s account balance.

The economy has been stricken by a balance-of-payments crisis as it attempts to service crippling external debt, while months of political chaos have scared off foreign investment.

Inflation has rocketed, the rupee has plummeted, and the country is struggling to afford imports, causing a severe decline in industrial output.

Securing financial support from friendly nations has been a key condition of the IMF for approving a new standby deal for Pakistan worth US$3 billion.

The package will be considered for approval by the IMF’s executive board meeting in Washington this week.

“As a time-tested friend & brotherly country, the UAE has always come forward to support Pakistan,” Prime Minister Shehbaz Sharif tweeted late Wednesday.

“We deeply acknowledge this kind gesture & consider it critical to our efforts to stabilise the economy.”

Finance Minister Ishaq Dar said the UAE deposit would be reflected on the books by Friday.

Years of financial mismanagement have pushed Pakistan’s economy to the limit, exacerbated by the Covid pandemic, a global energy crisis and record floods that submerged a third of the country last year.

Pakistan’s headline inflation eased for the first time in seven months in June, a bright spot for a beleaguered government that must call an election later this year.

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