The United Arab Emirates (UAE) has refinanced a $2 billion debt for a year, despite the central bank’s request for fresh loans to help stabilize foreign exchange reserves, which had fallen by a quarter in only two weeks.
In addition to obtaining the rollover, Pakistani officials were able to secure a statement from the International Monetary Fund (IMF) on Monday, which helped to soothe the nervous markets, which threatened to further depreciate the rupee against the US dollar.
The UAE’s $2 billion debt has been extended for another year, according to Finance Secretary Hamid Yaqoob Sheikh, who spoke to The Express Tribune on Monday. Last month, the facility came to an end, and Pakistan requested a three-year extension.
Imran Khan, the former prime minister, proposed the $6 billion facility in November 2018, but the UAE authorized $2 billion for a three-year term that began in early 2019. It was the second significant facility postponed by a foreign government in the last ten days.
Despite considerable assistance from China and the UAE, foreign exchange reserves continued to decline.