UAE comes to Pakistan's rescue! Signs $3 billion bailout package with Islamabad

Pakistan and the UAE on Tuesday signed a USD 3 billion bailout package, as part of Abu Dhabi's support to boost the cash-strapped country's dwindling dollar reserves.

The agreement will help Pakistan achieve financial stability and overcome economic challenges. (Image: AFP)

Islamabad: Pakistan and the United Arab Emirates (UAE) on Tuesday signed a USD 3 billion bailout package, as part of Abu Dhabi's support to boost the cash-strapped country's dwindling dollar reserves. The UAE in December last year had announced to provide USD 3 billion financial assistance to Pakistan after Saudi Arabia made a similar commitment to help Islamabad successfully overcome international payment crisis and to avoid stringent International Monetary Fund (IMF) deal. Tuesday's agreement was signed between State Bank of Pakistan (SBP) chief Tariq Bajwa and Abu Dhabi Fund for Development (ADFD) Director General Mohammed Saif Al Suwaidi. "UAE has formalized US$3bn deposit in the State Bank of Pakistan. DG ADFD & the Governor SBP inked the agreement at #ADFD Headquarters in Abu Dhabi," Foreign Office spokesman Mohammad Faisal tweeted. He said the agreement will help Pakistan achieve financial stability and overcome economic challenges and noted ADFD's support over the years to stimulate Pakistan's economic growth and sustainable development. Speaking on the occasion, Suwaidi said, "The directive to deposit USD 3 billion with the State Bank of Pakistan aligns with the UAE leadership's keenness to bolster Pakistan's economy, help its government achieve financial stability and overcome economic challenges, and drive comprehensive development in the country." He added, "ADFD and the Government of Pakistan have enjoyed strong and long-standing ties dating back to 1981. The Fund's efforts have significantly contributed to improving socio-economic conditions in the country, boosting strategic growth and achieving the development priorities of the Pakistani government. To date, ADFD has provided AED1.5 billion to fund sustainable development projects in Pakistan spanning diverse sectors, including transport, water and agriculture, healthcare, and education, according to a press release. The UAE had committed the financial assistance during Prime Minister Imran Khan's visit to Qatar last month to seek investment and provision of LNG on deferred payments. Pakistan has a 15-year contract with Qatar for the supply of LNG. The Saudi and the UAE governments have played a major role in helping Pakistan to meet around USD 12 billion shortfalls in the balance of payments in 2018-19 fiscal year, government officials said.