July 13, 2023
ISLAMABAD – Finance Minister Ishaq Dar announced on Wednesday that Pakistan had received $1 billion from the United Arab Emirates, saying that the funds would boost the declining foreign exchange reserves held by the central bank.
“We received the confirmation some time ago that our brother country, our friend, the UAE has deposited $1bn to the State Bank’s account. The Federal Reserves Bank has confirmed that this amount has been credited to the [SBP’s] account,” he said in a video message broadcast live on television.
Later, he also tweeted the development.
State Bank of Pakistan (SBP) has received today a deposit of $1 billion from United Arab Emirates. This inflow has further increased forex reserves held by SBP and will accordingly be reflected in the forex reserves position for the week ending 14July2023.
— Ishaq Dar (@MIshaqDar50) July 12, 2023
The minister’s announcement came a day after Saudi Arabia deposited $2bn with the central bank and just hours before a crucial meeting of the International Monetary Fund’s (IMF) executive board that Pakistan hopes would approve a $3bn standby arrangement agreed last month.
The UAE had confirmed its commitment to the IMF for its bilateral financial support of $1bn to Pakistan in April after the global lender had made the release of funds under a bailout programme, which expired in June with $2.5bn pending under it and as the Fund and Islamabad agreed on a new standby arrangement.
Similarly, Riyadh too had pledged the funds it released yesterday in April, but had held off depositing the money with the SBP until it was sure that the now-expired IMF bailout package would be forthcoming.
In his address today, Dar said funds received from Saudi Arabia and the UAE this week had collectively “increased the reserves by $3bn in two days”.
This would reflect in the update for foreign exchange reserves for the week ending on July 14, he added.
The minister expressed gratitude to the UAE leadership on behalf of Prime Minister Shehbaz Sharif, Chief of Army Staff Gen Asim Munir and the Pakistani nation for proving to be a friend, as always, especially when the country was facing difficult times.
He further said the UAE had assured PM Shehbaz during his recent short trip there of depositing the promised funds soon. “They gave similar messages to me and the army chief as well.”
Separately, Prime Minister Shehbaz Sharif also thanked UAE President H.H. Mohamed Bin Zayed for the $1 billion deposit.
“As a time-tested friend and brotherly country, the UAE has always come forward to support Pakistan,” he said, adding that Pakistan acknowledged the “kind gesture” and considered it critical to the efforts to stabilise the economy.
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
The financial support from Saudi Arabia and UAE will shore up the depleting foreign exchange reserves at the central bank, which had dipped to cover barely a month of controlled imports.
Meanwhile, the funding also raises hopes of the IMF’s executive board approving the new deal that is expected to ease the country’s financial crisis.
The nine-month standby arrangement, if approved, will bring $3bn, or 111pc of Pakistan’s IMF quota.