UAE gave a big blow to Pakistan; Friendship with Iran proved costly! Know what is the matter of 3.5 billion dollars?

Pakistan-UAE Loan Repayment: The impact of the ongoing war in West Asia is now clearly visible on Pakistan’s economy. The prices of petrol and diesel are increasing rapidly, due to which the burden of inflation on the general public has increased. Meanwhile, United Arab Emirates (UAE) has created a new problem for Pakistan.

According to reports, UAE has asked Pakistan to repay the loan of $3.5 billion by the end of this month. A major reason for this is said to be Pakistan’s increasing closeness with Iran, due to which Abu Dhabi is unhappy.

Loan repayment deadline and increasing pressure

The deadline given by UAE has deepened Pakistan’s economic challenges. This loan was given to Pakistan through Abu Dhabi Development Fund in 2019 to improve the balance of payments. Now the sudden demand for its return has put the government in a difficult situation.

Besides, there is uncertainty over the possible aid package of $2 billion to be received from UAE. Pakistan has decided to repay the loan within the stipulated time limit to maintain national honour, although this is likely to increase the economic pressure further.

Threat to foreign exchange reserves

The Central Bank of Pakistan currently has foreign exchange reserves of about $16.3 billion. If it repays the debt of about 3.5 billion dollars, then this reserve can reduce by about 18%. This will have a serious impact on the import capacity of the country and the availability of essential commodities may be affected.

Experts believe that this situation may further weaken the economic stability of Pakistan, due to which inflation and financial crisis may deepen in the future.

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