Pakistan has stated that it remains in active communication with the United Arab Emirates regarding the rollover of a $2 billion debt facility, asserting that there is no issue surrounding its extension even as formal confirmation from the Gulf country remains pending. Finance Minister Muhammad Aurangzeb conveyed this position while speaking to journalists after attending a meeting of the National Assembly Standing Committee on Finance.
The minister said Pakistan was in contact with UAE authorities and described the rollover process as smooth, although he did not confirm whether the UAE had formally agreed to extend the repayment period for one or two years, as requested in December. His remarks suggest that while dialogue is ongoing, a definitive extension beyond the short-term arrangement has not yet been publicly communicated.
The $2 billion facility originally matured between January 16 and 22. Unlike previous practice, where the UAE would typically extend such deposits for a full year, the repayment period was initially prolonged by only one month this time. There has been no official announcement clarifying whether a longer rollover has been granted. Sources have indicated that when the debt maturity was extended in January last year, the UAE had signaled it could be the final extension under existing terms.
Under the broader $7 billion International Monetary Fund programme, the UAE, Saudi Arabia and China have committed to maintaining a combined $12.5 billion in cash deposits with the State Bank of Pakistan until the programme concludes in September next year. The finance minister reiterated that Pakistan’s external financing gap had been fully met and that external funding requirements had already been discussed with the IMF at the start of the arrangement. These financing needs will be reviewed again during upcoming negotiations.
The IMF mission has arrived in Karachi to assess the central bank’s performance against agreed benchmarks, including targets for net international reserves, net domestic assets and reduction in the swap position, alongside reviews of monetary and exchange rate policies. Pakistan and the IMF have initiated discussions under both the $7 billion Extended Fund Facility and the $1.4 billion Resilience and Sustainability Facility. If talks conclude successfully by March 11, the IMF board may approve two loan tranches totaling $1.2 billion.
Finance Minister Aurangzeb said Pakistan enters the discussions in a strong position, adding that engagements will cover both performance assessments and forward-looking policy measures. Prime Minister Shehbaz Sharif, the finance minister and the national coordinator of the Special Investment Facilitation Council, Lt Gen Sarfraz Ahmad, have publicly raised concerns over maintaining interest rates in double digits. Exporters have also objected to holding the rupee-dollar parity around Rs279 and have sought a 4 percent depreciation to support competitiveness.
Meanwhile, structural reforms tied to IMF conditions are under debate. To meet programme benchmarks, the government has proposed amendments to the Exim Bank law to align it with the State-Owned Enterprises Act. Finance Secretary Imdadullah Bosal briefed the standing committee that the SOEs Act would take precedence over the Exim Bank framework and that a majority of board members, including the chairman, would be drawn from the private sector.
Under the proposal, the Exim Bank president would be appointed by a three-fourths board majority, including a mandatory vote from the ex-officio member representing the finance ministry. However, provisions requiring finance division approval for hiring or removing the president triggered concerns about bureaucratic control. Syed Naveed Qamar, chairman of the committee, argued that granting veto power to the finance division would consolidate excessive influence. The standing committee rejected the proposal and requested a review of the amendment.
Aurangzeb assured lawmakers that the provisions would be reconsidered. The debate comes as the IMF pushes for reduced government involvement in state-owned enterprises, with amendments to laws governing 10 SOEs, including the Exim Bank, required by August 2026 to align with the SOE Act.
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