The State Bank of Pakistan has confirmed that the Pakistani government has returned $2 billion in debt to the United Arab Emirates (UAE).
The amount is kept with the central banks as a safe deposit.
Pakistan and Saudi Arabia signed an agreement to extend the maturity of Riyadh’s $3 billion deposit placed with the SBP.
Finance Minister Muhammad Aurangzeb on Tuesday had said that they were considering Eurobonds, loans from other countries and commercial debt to replace the loan facility from the UAE and manage its foreign reserves.
He said that the shock from the ongoing war in the Middle East meant that Pakistan must consider a strategic petroleum reserve and a faster switch to renewable energy.
“All options are on the table,” Aurangzeb said when asked if the government was in talks with Saudi Arabia for a loan that could replace the UAE facility.
Aurangzeb, speaking on the sidelines of the IMF/World Bank annual spring meetings, had said the country could manage all debt repayments, and that its reserves remained at roughly 2.8 months of import cover.
Maintaining at least that level, he said, would be “an important aspect of our overall macro stability as we go forward.”
“We are looking at Eurobond, we are looking at Islamic sukuk, we are looking at dollar-settled rupee-linked bonds,” Aurangzeb had said, adding that they expected to issue Eurobonds this year and are also exploring commercial loans.
He had said while the country had not yet requested any addition or changes to its $7 billion IMF lending programme due to the economic shocks of the war in the Middle East, it was a potential option.
