Pakistan in a spot of bother as UAE could also seek early repayment of loan
New Delhi, Jan 18: Pakistan is facing the possibility of being asked to pay up the loan taken from United Arab Emirates. Months back Saudi Arabia too had sought an early repayment of the USD 3 billion loan.
In 2018 after Imran Khan became Prime Minister, Saudi Arabia had provided Pakistan with a USD 6.2 billion financial support. This was a USD 3 billion loan and a USD 3.2 billion deferred oil financing facility.
Following a fall in bi-lateral ties after Pakistan sought to form an alternative Muslim coalition with Turkey and Malaysia, Saudi Arabia initially withdrew the arrangement for deferred payment and then asked Pakistan last year to repay the loan.
As Pakistan gets ready to pay the final tranche of USD 1 billion, it now faces of the possibility of being asked by the UAE for early repayment of USD 3 billion financial support package that was announced in December 2018.
As of now the UAE has not indicated if it will extend a USD 1 billion loan part of the USD 3 billion package that would be payable on January 24, a report in The Express Tribune newspaper said. While quoting a senior unnamed official of the Pakistan Finance Minister, the report said, in case UAE does not withdraw the facility, the loan would be considered extended for one more year.
The report also said that Pakistan is apprehensive that after Saudi Arabi's decision to withdraw its bailout package, the UAE too may follow suit. Pakistan has turned to China for support and has so far taken three loans from the country to repay the USD 3 billion loan to Saudi Arabia.
"Beijing gave $1 billion soft loan and two separate financing lines of $1.5 billion and $500 million to pay back the Saudi debt," the report said. Pakistan's central bank's foreign exchange of USD 13.4 billion are fragile as most of it consists of loans. As of last November, the short-term loans taken from commercial banks amount to USD 4.6 billion.