IMF presses Pakistan to secure one-year rollover of $2B UAE deposit

The International Monetary Fund (IMF) has asked Pakistan to secure at least a one-year rollover of a $2 billion deposit placed by the United Arab Emirates, according to officials familiar with the discussions.

The issue came up during ongoing economic review talks between an IMF delegation and Pakistani authorities. Sources said the IMF team questioned why the UAE deposit had not yet been rolled over for a full year.

Officials from the State Bank of Pakistan assured the delegation during the review that significant progress was being made to secure the rollover. They said efforts are underway in line with Pakistan’s external financing plan agreed upon with the IMF.

Sources at the Finance Ministry said a meeting between the IMF delegation and the UAE ambassador is expected as part of efforts to make headway on the matter.

Central bank officials briefed the IMF team that the government is implementing the agreed external financing plan. They added that discussions are continuing even if the deposit is rolled over on a short-term basis.

The IMF delegation also held talks with Pakistani authorities on foreign exchange reserves, monetary policy, the exchange rate and counterterrorism financing measures. Technical-level discussions covered anti-money laundering steps, banking regulations and other key financial sector issues.

During an introductory session, the governor of the State Bank and senior management officials briefed the IMF team on the country’s economic and financial situation.

According to sources, the IMF delegation will continue negotiations with central bank officials in Karachi for two more days.

Pakistan has relied on rollovers of deposits from friendly countries, including the United Arab Emirates, to help shore up its foreign exchange reserves as it implements economic reforms under the IMF program. The United Arab Emirates has agreed in principle to roll over a $2 billion deposit with Pakistan for two months, extending the facility until April 17.

Earlier, the UAE had extended the maturity of the same $2 billion deposit for one month after $1 billion matured on February 16 and another $1 billion on February 22. In January, the UAE had similarly granted a one-month rollover when the amount matured.

The government has sought a longer-term rollover of the deposit and conveyed to UAE authorities that it would again request an extended arrangement after completion of the IMF review.