{"id":42470,"date":"2026-03-04T15:04:40","date_gmt":"2026-03-04T15:04:40","guid":{"rendered":"https:\/\/ipp-news.com\/?p=42470"},"modified":"2026-03-04T15:04:40","modified_gmt":"2026-03-04T15:04:40","slug":"no-demand-for-repayment-of-2b-loan-from-uae-sbp-governor-briefs-na-panel","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=42470","title":{"rendered":"No demand for repayment of $2b loan from UAE, SBP governor briefs NA panel"},"content":{"rendered":"
State Bank of Pakistan Governor Jameel Ahmad said on Wednesday that the United Arab Emirates (UAE) was not demanding repayment of a $2 billion loan, but\u00a0had instead\u00a0shifted it\u00a0to a monthly rollover.<\/p>\n

The SBP governor provided the National Assemly’s Standing Committee on Finance insights into the country\u2019s economic challenges, including the UAE\u2019s loan rollover, inflation rates\u00a0and export performance.<\/p>\n

“The UAE is not asking back for a loan of $2b.\u00a0The only difference is that earlier the UAE’s loan was rolled over on an annual basis, now it is being rolled over on a monthly basis,” he said.<\/p>\n

\u00a0“Initially, the debt servicing had reached $4b, but this has now been reduced,” he stated, acknowledging the strain on Pakistan\u2019s exports.<\/p>\n

Read More: OGRA orders daily LPG stock reporting amid supply concerns<\/p>\n

Highly placed sources in the federal government and the central bank told\u00a0The Express Tribune\u00a0last month that the UAE had rolled over two loans of $1b\u00a0each, which matured on January 16 and 22. They said the debt was rolled over for one month to allow time for further discussions on the tenor and interest rate.\u00a0<\/p>\n

Under the $7b\u00a0International Monetary Fund\u00a0(IMF) programme, the UAE, Saudi Arabia and China have committed to maintaining their combined $12.5b\u00a0in cash deposits with the SBP at least until the programme expires in September next year. However, last month was the first time the UAE extended the debt repayment period by only one month, unlike the previous practice of granting one-year extensions.\u00a0<\/p>\n

In December, Govenor\u00a0Ahmad had requested the UAE government to roll over $2.5b\u00a0in debt for two years and cut the interest rate by almost half. Subsequently, Prime Minister Shehbaz Sharif also requested the UAE president to extend the repayment period. The prime minister said the UAE had agreed to roll over the debt, but did not provide further details.<\/p>\n

The UAE provided $2b\u00a0to Pakistan in 2018 for one year, but Pakistan was unable to repay the amount and has sought rollovers annually since then. Later, the UAE extended another loan of $1b\u00a0in 2023 to help Pakistan meet external financing requirements for an IMF bailout.<\/p>\n

The $2b\u00a0debt forms part of Pakistan’s foreign exchange reserves of $16b. Pakistan is paying about $130 million annually in interest on the UAE debt at current rates.\u00a0In 2018, the UAE charged an interest rate of 3% on the debt, but last year increased it to 6.5%. Pakistan has requested the UAE to reduce the rate to around 3%, citing improvements in its credit rating and lower global interest rates.<\/p>\n

Pressure on\u00a0exports<\/p>\n

The governor further highlighted that, despite the ongoing pressure\u00a0on exports, the situation was being managed. This, he noted, was\u00a0partially due to declining food prices globally, including a reduction in rice exports, which alone accounted for a $1b drop.<\/p>\n

Regarding inflation, the SBP governor projected that it was\u00a0expected to stay between 5% and 7% this year.<\/p>\n

\u201cIn 2022, the current account deficit was $17.5 billion, but through strategic measures, we managed to reduce it to just 1% of GDP in 2023, with a surplus of $2b,\u201d he explained. Ahmad pointed out that this marked\u00a0the first current account surplus in 14 years.<\/p>\n

He further stated that\u00a0foreign exchange reserves had\u00a0increased significantly, from $2.8b, just enough for two weeks of imports, to over $16b. His target, the governor said, was\u00a0is to raise the reserves to $18b by the end of June 2026 and to $20b\u00a0by December 2026.<\/p>\n

Read More: Govt refuses IMF help on 142 reforms<\/p>\n

The governor also discussed Pakistan’s rising external debt, which has grown from $55b\u00a0in 2016 to $103b. He assured that the debt level had\u00a0remained stable since last year, and Pakistan\u2019s total debt stood\u00a0at $148b, with the government\u2019s share at approximately $103b.<\/p>\n

In response to concerns raised by the committee, Chairman Saleem Mandviwala remarked that the country\u2019s export schemes were being phased out, which he believed contributed to the pressure on exports.<\/p>\n

However, the SBP govenor countered\u00a0that export financing schemes had not been abolished and attributed the export decline to multiple factors, including the global food price drop and weaker demand.<\/p>\n

Furthermore, the governor acknowledged the economic strain of being under an IMF\u00a0programme, which limited the country\u2019s ability to offer subsidies and rebates. He noted that, despite challenges, the central bank continued to pursue strategies to ensure economic stability.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

State Bank of Pakistan Governor Jameel Ahmad said on Wednesday that the United Arab Emirates (UAE) was not demanding repayment of a $2 billion loan, but\u00a0had instead\u00a0shifted it\u00a0to a monthly rollover. The SBP governor provided the National Assemly’s Standing Committee on Finance insights into the country\u2019s economic challenges, including the UAE\u2019s loan rollover, inflation rates\u00a0and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-42470","post","type-post","status-publish","format-standard","hentry","category-english-news"],"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/42470","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42470"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/42470\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42470"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42470"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42470"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}