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Pakistan hopeful of rollover of deposits from UAE, Saudi Arabia

Updated 23 May, 2022
<p>Finance Minister Miftah Ismail addresses a press conference in Karachi. Screengrab via YouTube/PTV News</p>

Finance Minister Miftah Ismail addresses a press conference in Karachi. Screengrab via YouTube/PTV News

The country’s finance czar on Monday expressed his hopes that Pakistan would be able to have a rollover of deposits from the United Arab Emirates and Saudi Arabia.

Finance Minister Miftah Ismail, who would leave for Doha in Qatar for talks with the International Monetary Fund for the revival of the loan programme, was addressing a press conference in Karachi.

Pakistan has asked the IMF to enhance the size of its $6 billion loan programme by $2 billion and extend the fund facility programme by one year, as the global lender sought a political commitment from the country.

At the start of this month, Prime Minister Shehbaz Sharif visited Saudi Arabia and the United Arab Emirates after assuming charge of the office. Pakistan and Saudi Arabia had discussed the possibility of “augmenting” the kingdom’s $3 billion deposit in the central bank by extending its term “or through other options”.

The UAE on April 5 deferred a $2 billion debt payment, which Pakistan was bound to repay in March, at Islamabad’s request. The Gulf country had granted a loan of $2 billion to Pakistan in 2019 to help the country overcome economic difficulties.

PM Shehbaz while addressing a gathering in Karachi on Friday lamented the country’s consecutive efforts to seek loans from friendly Gulf countries. “Only we know, how we ask them for money.”

“I have to return the $21 billion amount – including deposits from UAE and Saudi Arabia – borrowed by Imran Khan. Hopefully, we will be able to re-roll these deposits,” Miftah said and described such developments as the reason to go for the IMF programme.

Miftah reiterated his accusations against the former PTI government, saying that the Imran Khan-led cabinet left Rs1,300 worth of primary trade deficit in the country and described their decisions as a “landmine” for the new coalition government.

The finance minister’s onslaught came after his predecessor Shaukat Tarin, who claimed to have turned down the new government’s request for assistance. Addressing a presser on Sunday, Tarin called for holding fresh elections with a strong interim set-up. He expressed his willingness to help the government after a new set-up is there.

Elaborating the details of his Doha trip, Miftah said the IMF had two weeks ago excused itself from visiting Pakistan in view of the PTI chief’s scheduled “sit-in” in Islamabad as the global lender was “afraid”.

He accused the former premier of giving “unfettered powers” to Farah Khan, a close friend of Imran Khan’s wife Bushra Bibi. “PM Imran’s long march is aimed at saving Farah.”

Miftah added that Imran Khan and Shaukat Tarin had promised the IMF to impose fuel taxes, leading to an Rs100 increase in petrol and an Rs150 jump in diesel price. “But, I will tell the IMF our country cannot afford such promises made by [his predecessor] Shaukat Tarin. So please give me a break. I cannot do this right now.”

He laughed off Tarin’s statement that the previous government had left funds in the exchequer for supporting the subsidies. Quoting the former finance secretary briefing, he said Rs1,300 was the projected primary deficit and Rs56 billion was the federal deficit two days before his new role.

Miftah described Tarin’s statement as “lies” and hinted at an increase in the interest rate, which will be announced by the State Bank of Pakistan on Monday (today). He rebuffed Tarin’s claims of seeking suggestions for stabilizing the economy.

“Hopefully, I will after signing an agreement with IMF in these two days. Hopefully, I will bring some positive news from the IMF,” Miftah said, “I will not increase petrol or diesel prices, PM Shehbaz and Nawaz Sharif have asked me to not take such decisions. And I will accepts those demands, which were accepted by Shaukat Tarin.”