Pakistani government officials are now in shock after the United Arab Emirates (UAE) demanded the return of its one billion dollars. The amount is deposited at the State bank of Pakistan. The money has been demanded since the sum has matured and the deadline to return the money is 12 march.
Additionally, top Pakistani officials have made several attempts to contact the UAE, notably the Crown Prince. So far, there has been no response. Pakistan’s economy is currently in poor shape, and this development will undoubtedly have a bad effect on it. Noticing this, Pakistan has pleaded with the UAE that returning such a large sum of money will have a negative effect on its current economic situation.
The UAE, on the other hand, is not the only country that wants its money back. Pakistan’s attempt to shape an alternative Muslim alliance with Turkey and Malaysia led to the situation where Saudi Arabia also initially revoked the agreement for deferred payments for oil purchases and then asked Pakistan to repay the loan last year. later on, the bilateral relationship between the two nations started to deteriorate.
Pakistan had previously taken a loan from China to repay a $3 billion loan from Saudi Arabia, according to the Pakistani Ministry of Finance and the State Bank of Pakistan (SBP). The country is facing a huge debt crisis and struggling to get financial support from international bodies.
The IMF and Pakistan signed a staff-level agreement earlier this year to release $500 million as part of a larger loan agreement. In 2019, the international financial institution agreed to lend the country $6 billion to help it deal with its debt crisis in return for reforms.