Pakistan to receive UAE's $3bn in one go, plus oil on credit: sources

ISLAMABAD: Pakistan is expected to receive $3 billion from the United Arab Emirates (UAE) in one go, sources said Sunday.

The sources further explained that the interest rate on the amount the UAE will deposit in the State Bank of Pakistan (SBP) will be at an interest rate of 2.18 percent.

The monetary package, courtesy of the Emirates, is expected to comprise cheaper loans and budget support as part of the economic aid, sources added. In addition, the UAE is also expected to sell on credit $3 billion worth of oil for three years — oil valued at $250 million every month.

Earlier, on Friday, the UAE had announced to deposit $3 billion in the SBP to support Pakistan's financial and monetary policy.

It will do so "to support the financial and monetary policy of the Islamic Republic of Pakistan and to enhance liquidity and monetary reserves of foreign currencies at the State Bank of Pakistan", the UAE Embassy in Islamabad had said in a statement.

Hamad Obaid Al-Zaabi, the UAE's Ambassador to Pakistan, had commented that the deposit from the Abu Dhabi Fund for Development aims to strengthen Pakistan's fiscal and monetary policy in addition to the financial stability.

The ambassador had noted that the UAE’s support to Pakistan is based on the historical relations between the two peoples, and the social and cultural ties that unite the two countries, while the bilateral relations manifests the prospects of broad horizons of cooperation in various fields.

The Abu Dhabi Fund for Development has financed eight development projects in Pakistan worth a total of AED1.5 billion, including AED931 million in grants. The sum covered projects in sectors such as energy, health, education, and roads.

Prime Minister Imran Khan thanked the UAE for supporting Pakistan and said it reflects commitment and friendship between the two countries, saying: "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 wrote.

Shah Mehmood Qureshi, the minister of foreign affairs, also hailed the development and thanked Abu Dhabi's Crown Prince for the generous financial support, stating: "We thank Crown Prince H.H @MohamedBinZayed for his generous financial support of US$ 3 Billion."

"This is a manifestation of the close fraternal ties between Pakistan & UAE which have always stood the test of time," Qureshi added.

Finance Minister Asad Umar on Thursday said the country's foreign exchange reserves have increased by 12.5 percent.