Pakistan on Thursday received inflows amounting to one billion dollars from the United Arab Emirates (UAE) as balance of payment support. An amount of $3 billion was pledged by the UAE in December to support Pakistan's external account and on January 22, 2019, State Bank of Pakistan (SBP) signed an agreement with Abu Dhabi Fund for Development (ADFD) for placement of $3 billion deposits with Pakistan.
As per the agreement, the first tranche amounting to $1 billion was released by ADFD on Thursday and accordingly transferred into State Bank of Pakistan's account. With arrival of these inflows Pakistan's total liquid foreign exchange reserves are estimated to reach $14.5 billion mark. Abid Qamar, the spokesman for SBP, confirmed that Pakistan has received one billion dollars from the UAE under an agreement signed on Tuesday by governor SBP Tariq Bajwa and Director General ADFD Mohammad Said Al Suwaidi.
Sources said that as per the agreement the remaining $2 billion of the pledged amount will be released by ADFD in two installments over the next two weeks. For the last one year, Pakistan's external account is under pressure due to continued and massive external debt servicing, which compelled the newly elected PTI government to seek financial assistance from friendly countries and the IMF. According to the weekly report issued on Thursday, foreign exchange reserves held by SBP decreased by $265 million to $6.636 billion end of last week due to external debt servicing and other official payments.
The inflow from the UAE will reflect in the next foreign exchange report to be issued on January 31, 2019. However, it is estimated that with the arrival of these inflows, the country's total foreign exchange reserves are likely to reach $14.5 billion mark, including $7.5 billion of SBP. During the last week ended on January 18, 2018, reserves held by banks increased by $33 million to $6.62 billion up from $6.588 billion.