Relief could be on the horizon for Pakistan's beleaguered finances, as the United Arab Emirates (UAE) is reportedly considering a one-year rollover of a $2 billion loan maturing this week.
The news comes on the heels of a successful International Monetary Fund (IMF) review, offering a much-needed shot in the arm for the country's struggling economy.
Sources within the Ministry of Finance indicated that caretaker Prime Minister Anwarul Haq Kakar had written to the UAE president requesting the extension. The loan, split into two parts - $1 billion at 3% interest and another $1 billion at 6.5% - was originally due on January 23.
The sources said that while formal confirmation is yet to arrive, officials are optimistic about securing the rollover. Discussions are reportedly ongoing between the Prime Minister's Office and the Ministry of Finance on the exact terms of the agreement.
The Ministry of Finance officials are hopeful that $2 billion of debt will be deferred during this week, the sources added.
This potential financial assistance from the UAE would be a significant boost for Pakistan, facing severe foreign exchange reserves depletion and mounting pressure to repay external debts. The successful IMF review earlier this month had already unlocked a crucial tranche of funding, paving the way for further financial support from multilateral institutions.
