Pakistan gets $4bn lifeline as economic woes mount

Pakistan on Thurs­day secured a lifeline of about $4 billion from the United Arab Emirates and Saudi Arabia to sail through the immediate challenge of a sovereign default amid rapidly shrinking foreign exchange reserves, massive flood damages and an overall economic slowdown. Two separate official announcements said the UAE pledged to roll over $2bn debt payable over the next two months and topped this with an additional $1bn support during an ongoing visit of Prime Minister Shehbaz Sharif to the emirates. Separately, the Saudi Fund for Development (SFD) signed an agreement in Islamabad to fund $1bn worth of oil imports on deferred payment. The central bank’s reserves dropped to a critical level of $4.34bn on Thursday, the lowest since February 2014 and barely enough to finance less than one month of controlled imports.