The United Arab Emirates (UAE) has confirmed rollover of its two deposits of $1 billion each placed with the State Bank of Pakistan (SBP) for another one year, which were maturing in January 2024, a SBP statement said on Wednesday.

The central bank shared the development in a post on X, formerly Twitter.

The development came hours after the SBP announced that Pakistan had received a tranche of $705.6 million from the International Monetary Fund (IMF).

“The SBP has received SDR 528 million (equivalent to $705.6 million) in value 16th January 2024 from IMF following successful completion of the first review by the Executive Board of IMF under Stand By Arrangement (SBA),” the SBP said.

In January 2023, the UAE agreed to roll over the existing loan of $2 billion and provide an additional loan of $1 billion.

The latest development holds significance for Pakistan’s economic landscape as the country faces a low level of foreign exchange reserves amid repayments and low non-debt-creating dollar inflows.

Foreign exchange reserves held by the SBP decreased by $66 million weekly, clocking in at $8.15 billion as of January 5, the central bank data showed.

The IMF disbursement would reflect in the SBP reserves for the week ending on January 19, 2024, the central bank said.

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