Pakistan’s economy is set to receive a boost with the confirmation of $1bn in financial support from the United Arab Emirates (UAE). The announcement was made by Pakistan’s finance minister, Ishaq Dar, on Twitter. The UAE’s commitment is expected to lead to a staff-level agreement (SLA) between Pakistan and the International Monetary Fund (IMF), which could unlock multilateral disbursements. Talks between the IMF and Pakistan’s finance ministry have been ongoing since February, with the government seeking the revival of a $7bn bailout programme in order to secure a $1.1bn tranche. The IMF tranche is seen as critical for Pakistan, as it will unlock other external financing avenues. The country’s foreign currency reserves have dipped to $4bn, putting pressure on the import-heavy economy.
Prime Minister Shehbaz Sharif has previously stated that external financing commitments must be fulfilled before the IMF releases bailout measures. Saudi Arabia, China and the UAE are among the countries that have made commitments to help fund Pakistan’s balance of payments. The IMF has expressed hope that its current programme with Pakistan will be successfully completed.
