UAE strengthens Pakistan’s foreign exchange reserves with $1 billion deposit
The State Bank of Pakistan received a $1 billion deposit from the UAE on Wednesday, a day after Saudi Arabia transferred $2 billion to Islamabad. The deposit came ahead of IMF approving a $3 billion bailout to save the impoverished nation from defaulting on its debt repayments.
Years of financial mismanagement have pushed Pakistan into a deep economic crisis, exacerbated by the COVID-19 pandemic, a global energy crisis, last year’s deadly floods that submerged a third of the country, and months of political drama scaring off foreign investment.
The UAE deposit would be reflected on the books by July 14, Finance Minister Ishaq Dar said. Acknowledging the gesture, Prime Minister Shehbaz Sharif tweeted Wednesday: “As a time-tested friend and brotherly country, the UAE has always come forward to support Pakistan.”
Grateful to my dear brother, H.H. Mohamed Bin Zayed, President of the UAE, for the deposit of $1 billion with the State Bank of Pakistan. As a time-tested friend & brotherly country, the UAE has always come forward to support Pakistan. We deeply acknowledge this kind gesture &…— Shehbaz Sharif (@CMShehbaz) July 12, 2023
IMF Assistance Kept On Hold For Months
In relation to the International Monetary Fund’s decision, the funds would be released over a nine-month period to support the Islamic nation’s economic stabilisation program. The bailout had been on hold since last December.
A breakthrough arrived after Prime Minister Sharif met IMF head Kristalina Georgieva at the Summit for a New Global Financing Pact in Paris amid shrinking reserves and increasing inflation, leading to a steep rise in food costs.
Pakistan – UAE Relationship More Than Just Transactional
Pakistan and the UAE have been sharing a strong bond of friendship for over 70 years. The multidimensional partnership involves trade and commerce as well as art and culture. Pakistan – UAE bilateral trade increased by 25.4% in 2021-22, compared to the previous year.
This year’s trade figures are quite encouraging too. Currently, more than 1.6 million Pakistanis are working across the Emirates in diverse fields, as skilled and unskilled workers, entrepreneurs and much more. They are valued in the country for their positive contribution.
Pakistanis consider the UAE their second home. People from both nations appreciate each other’s traditions and cuisines. Although the Emirates indeed offers scores of Pakistani workers with a market and humanitarian support, the relationship is far more than just transactional.
At the very core of the UAE – Pakistan relationship is goodwill and mutual respect.