By Anjali Sharma
WASHINGTON- Pakistan on Monday has reached out to Saudi Arabia and China seeking a loan of more than USD 3 billion that it needs to pay back to the United Arab Emirates, after depleting foreign reserves, according to a media reports.
Pakistan will be forced to repay the amount to the UAE by the end of this month after it failed to reach an agreement to roll over the debt that has been pending since 2018.
According to US media outlets the amount of support under discussion could be in the form of loans and investment.
Pakistan’s Prime Minister Shehbaz Sharif expressed “strong commitment to expanding its cooperation with the kingdom in all spheres, particularly in trade, investment, and economic development.”
The debt Pakistan owes to the UAE is significant as it makes up around 18 per cent of the country’s total foreign exchange reserves which stand at about USD 16 billion.
The decision came at a time when Pakistan is already facing heavy external commitments.
Islamabad is in the middle of a USD 7 billion International Monetary Fund programme, exports are under pressure, and a USD 1.3 billion Eurobond is due on April 8. Together, total outflows this month are expected to reach around USD 4.8 billion.
UAE had rolled over loans to Pakistan, often on easier terms.
Media reported that pattern has shifted in recent months.
Loans have been extended for shorter periods, and borrowing costs have risen from around 3 per cent in 2018 to 6.5 per cent last year.
