Pakistan has said the UAE has agreed to increase its financial assistance to Pakistan to $3 billion, a move key to bolster foreign exchange reserves for the South Asian nation reeling under an economic crisis.
UAE’s President Sheikh Mohamed bin Zayed Al Nahyan has agreed to provide $1 billion in a fresh loan and rollover an existing loan of $2 billion after a meeting with Prime Minister Shehbaz Sharif, Pakistan Prime Minister’s Office said in a statement Thursday.
UAE’s support comes two days after Saudi Arabia’s Crown Prince Mohammed bin Salman declared that it was considering to increase deposit in Pakistan’s central bank to $5 billion. Earlier this week, Pakistan also received comimtments of more than $10 billion in assistance after floods that inundated a third of the nation and cut its growth by half.
Pakistan’s economy has been strapped for funds after a gridlock with the International Monetary Fund over tax targets delayed disbursal of loan installments. The nation is facing a dollar shortage with foreign exchange reserves dropping to $5.85 billion, covering less than a month of imports.
The two nations also agreed to deepen the investment cooperation and enable investment integration opportunities, said the statement. The UAE had announced to invest $1 billion in Pakistani companies spanning various sectors last year.