ABU DHABI (AFP) - The United Arab Emirates will deposit US$ 3 billion in the central bank of Pakistan to help ‘enhance liquidity’ as the country struggles with a balance of payments crisis, state media said yesterday.
The transfer of 11 billion dirhams by the government-owned Abu Dhabi Fund for Development (ADFD) is expected to be carried out in the “coming days”, the WAM news agency said.
Quoting a statement from the ADFD, the state news agency said the amount is meant “to support the financial and monetary policy of the Islamic Republic of Pakistan”.
It will “enhance liquidity and monetary reserves of foreign currency” at the central bank, it added.
Pakistan is facing a widening balance of payments crisis. The rupee plunged almost five percent to a record low at the end of November, after what appeared to be a sixth devaluation by the central bank in the past year.
A team from the International Monetary Fund in November visited Pakistan for talks with officials on a possible IMF bailout but the discussions ended without any agreement.
Pakistan -- a regular borrower from the IMF since the 1980s last received an IMF bailout in 2013 to the tune of US$ 6.6 billion. It also secured US$ 6 billion in funding from Saudi Arabia and struck a 12-month deal for a cash lifeline during Pakistani Prime Minister Imran Khan’s visit to the kingdom in October.
Khan thanked the UAE yesterday “for supporting Pakistan so generously in our testing times”.
“This reflects our commitment and friendship that has remained steadfast over the years,” he said on Twitter.
The UAE announcement came days after Pakistan attended reconciliation talks between the United States and Taliban officials from Afghanistan hosted by the wealthy Gulf state in Abu Dhabi.
Islamabad has also received billions of dollars in Chinese loans to finance ambitious infrastructure projects.