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June 25, 2019
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Bailout package: UAE transfers another $1bn into SBP account

KARACHI: The United Arab Emirates (UAE) has deposited a second tranche of $1 billion into the State Bank of Pakistanthes (SBP) foreign currency reserves as part of its bail out package announced for Islamabad to help it avoid an imminent balance of payment crisis.

SBP spokesman Abid Qamar confirmed that the central received $1 billion from the UAE.

The financial assistance came following the signing of an agreement last Saturday on between the Abu Dhabi Fund for Development and the SBP for depositing the remaining $2 billion out of the committed $3 billion to shore up the central bank’s reserves.

The UAE had announced a $6-billion package for Pakistan in December 2018 including $3 billion in cash deposit and a credit line for the supply of oil on deferred payment amounting to $3 billion.

The UAE has provided the soft loan at an interest rate of 3%, Finance Minister Asad Umar disclosed last week. Abu Dhabi released the first tranche of $1 billion in January 2019.

Modalities for the supply of oil to Pakistan on deferred payment are yet to be finalised, it has been learnt.

The finance minister also said the country was set to receive a total of $4.1 billion from the UAE and China during the week that started on Monday. China has committed to provide $2.1 billion at an interest rate of 2.5%.

The SBP reserves will swell to around $12 billion with the receipt of $4.1 billion. Total reserves of the country would surge to around $19 billion, including those available with commercial banks in Pakistan, he said.