UAE Likely to Roll Over $2 Billion Loan to Pakistan This Week

The United Arab Emirates (UAE) is expected to roll over a $2 billion loan to Pakistan for one year, sources in the Ministry of Finance told ProPakistani. Sources said Caretaker Prime Minister Anwaar-ul-Haq Kakar wrote a letter to the President of the UAE to roll over the debt repayment slated for January 23. Ongoing discussions extend beyond the caretaker Prime Minister’s Office. Finance Ministry sources are confident that the $2 billion debt deferral will be successfully negotiated and finalized within this week. The terms of the rollover involve a 3 percent interest rate on $1 billion and a 6.5 percent rate on the remaining $1 billion. Notably, the liquid foreign exchange reserves held by the State Bank of Pakistan have strengthened since December despite the recent dip. On January 5, 2024, the foreign currency reserves held by the SBP were recorded at $8.155 billion, down $66 million compared to $8.221 billion on December 29, 2023. The central bank reserves have increased by over $1 billion over the last few sessions.