The move is designed to support ‘financial and monetary policy’ of Islamabad, according to state media
The United Arab Emirates will deposit $3 billion in the State Bank of Pakistan to help “enhance liquidity” as the country struggles with a balance of payments crisis, state media said.
The transfer of 11 billion dirhams by the government-owned Abu Dhabi Fund for Development (ADFD) is expected to be carried out in the “coming days,” the WAM news agency said. Quoting a statement from the ADFD, the state news agency said the amount is meant “to support the financial and monetary policy of the Islamic Republic of Pakistan.”
It will “enhance liquidity and monetary reserves of foreign currency” at the central bank, it added.
Prime Minister Imran Khan thanked the U.A.E. for its support in a post on Twitter. “I want to thank the UAE govt for supporting Pakistan so generously in our testing times. This reflects our commitment and friendship that has remained steadfast over the years,” he said.
Pakistan is facing a widening balance of payments crisis. The rupee plunged almost five percent to a record low at the end of November, after what appeared to be a sixth devaluation by the central bank in the past year. A team from the International Monetary Fund in November visited Pakistan for talks with officials on a possible IMF bailout but the discussions ended without any agreement.
Pakistan—a regular borrower from the IMF since the 1980s—last received an IMF bailout in 2013 to the tune of $6.6 billion. It also secured $6 billion in funding from Saudi Arabia and struck a 12-month deal for a cash lifeline during Prime Minister Imran Khan’s visit to the kingdom in October.
Islamabad also received billions of dollars in Chinese loans to finance ambitious infrastructure projects.