UAE could seek early repayment of loan to Pakistan

UAE could seek early repayment of loan to Pakistan

Pakistan is already struggling with its economical crisis, and now United Arab Emirates (UAE) could add on to its problems by seeking an early repayment of a $3 billion loan in its tough times.  

PM Khan with Shaikh Mohamed Bin Zayed.

Shortly after Imran Khan became the Prime Minister of Pakistan in 2018, the country got a $6.2 financial support package from Saudi Arabia. It was a $3 billion loan and a $3.2 billion deferred oil financing facility. Last year, Saudi Arabia asked Pakistan to pay back the loan it took from Saudi, and even withdrew the arrangement for deferred payments for oil purchases. This was done as Pakistan sought to form an alternative Muslim coalition with Turkey and Malaysia. Due to this move of Pakistan, Saudi and Pak’s bilateral ties were disrupted.  Pakistan is preparing itself to pay the final tranche of $1 billion for the Saudi loan.

It is possible that the United Arab Emirates (UAE) too could ask for the early repayment of a $3 billion financial support package announced in December 2018.

A senior official of Pakistan’s finance ministry said, “In case [the UAE] does not withdraw the facility, the loan would be considered extended for one more year.”

Though the Ministry did not comment on this matter, but the tribune reported that the Pakistan government is “apprehensive that after Saudi Arabia’s decision to withdraw its bailout package, the UAE might also follow suit.” The ministry said that the matter was a “bilateral confidential matter.”

According to sources in Pakistan’s finance minister, the newspaper reported that, ‘The UAE hasn’t indicated whether it will extend a $1 billion loan – part of the $3 billion package – that will become payable on January 24. The loan can be extended for a year.’

The UAE also withdrew the facility of $3 billion facility for deferred oil payments for Pakistan.

File Photo of Pakistan’s Prime Minister Imran Khan with China’s President Xi Jinping

Pakistan have got help from its all time support China. So far the country has taken three loans from China to repay the $3-billion loan from the Saudi. The newspaper reported, “Beijing gave $1 billion soft loan and two separate financing lines of $1.5 billion and $500 million to pay back the Saudi debt.”

Currently, the only support of the debt ridden country of Pakistan is its evergreen friend, China.

 

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