UAE Rolls Over $2 Billion Deposits for Pakistan, Confirms State Bank of Pakistan
The State Bank of Pakistan (SBP) has officially confirmed that the United Arab Emirates (UAE) has agreed to roll over two $1 billion deposits for another year. These deposits, initially set to mature this month, have been extended to January 2026, providing a crucial financial lifeline for Pakistan.
Significance for Pakistan’s Economy
The rollover of these deposits holds immense importance for Pakistan’s external financing, as it plays a pivotal role in meeting the conditions set by the International Monetary Fund (IMF) for a $7 billion bailout. Prime Minister Shehbaz Sharif’s recent announcement regarding the extension of the $2 billion payment from the UAE further underscores the significance of this financial arrangement.
Last year, Pakistan secured an IMF program with the support of various countries, including China, UAE, and Saudi Arabia, who provided essential financial assurances to facilitate IMF disbursements. The extension of the UAE deposits aligns with Pakistan’s ongoing efforts to stabilize its economy and ensure sustainable growth.
State Bank’s Report on Foreign Exchange Reserves
In addition to the deposit rollovers, the State Bank of Pakistan reported a notable increase in foreign exchange reserves, with a $30 million weekly rise bringing the total to $11.72 billion as of January 10, 2025. The total liquid reserves, including commercial banks’ holdings, amounted to $16.45 billion, highlighting a positive trend in Pakistan’s financial outlook.
This development not only strengthens Pakistan’s economic resilience but also reflects the confidence of international partners in the country’s financial stability. The cooperation between Pakistan and the UAE serves as a testament to the enduring partnership between the two nations and the shared commitment to fostering economic growth and prosperity.
As Pakistan continues to navigate economic challenges and pursue sustainable development, the extension of the UAE deposits stands out as a significant milestone in bolstering the country’s financial position and ensuring a stable economic future.
