The United Arab Emirates is hosting thousands of US troops at Al Dhafra Air Base near the capital Abu Dhabi, one of several US military sites in the Gulf. PHOTO: PEXELS
ISLAMABAD:
The Ministry of Foreign Affairs on Saturday rejected “misleading and unfounded comments” regarding Pakistan’s repayment of financial deposits in the UAE, clarifying that it was a routine transaction carried out under agreed terms.
The clarification follows reports that Pakistan has decided to return $3.5 billion to the UAE before the end of the month, with a senior official saying Abu Dhabi had requested immediate repayment of the amount.
The deposits, initially provided in 2019 through the Abu Dhabi Fund for Development, were part of external financial support aimed at stabilizing Pakistan’s balance of payments and had since been rolled over several times.
In a statement, Foreign Ministry spokesperson Tahir Andrabi said: “The deposits were placed within the framework of bilateral trade agreements, demonstrating the UAE’s strong support for Pakistan’s economic stability and prosperity. » He added that as per the mutually agreed terms, the government through the State Bank of Pakistan was now returning the overdue deposits.
“This is a routine financial transaction, and any attempt to portray it otherwise is erroneous and misleading,” he said.
The development is significant given Pakistan’s current external financing needs under its International Monetary Fund (IMF) program, which requires the country to secure around $12.5 billion in refinancing from key partners, including China, Saudi Arabia and the United Arab Emirates, to maintain its foreign reserves.
According to the senior official, the decision to return the deposits ended lingering uncertainty over the UAE funds, which in recent months had only been extended for short periods, sometimes as short as a month.
The latest data puts Pakistan’s central bank reserves at around $16.3 billion. A repayment of $3 billion would reduce these reserves by about 18 percent, significantly weakening the country’s external reserve and import coverage.
Reaffirming bilateral ties, Andrabi said, “Pakistan and the UAE share a long-standing fraternal partnership based on trust and strategic cooperation in the areas of trade, investment, defense and people-to-people ties,” adding that the relationship had strengthened over time.
“The people of Pakistan warmly cherish the pivotal role played by His Highness, the late Sheikh Zayed bin Sultan Al Nahyan, in forging this enduring friendship, as well as his special affection for Pakistan,” he said.
“Pakistan remains fully committed to further strengthening this enduring relationship for a shared and prosperous future,” he added.
At the same time, the Ministry of Finance said it was closely monitoring the situation. In an article on
“The Government of Pakistan remains committed to fulfilling all its external obligations,” the statement added.
