ISLAMABAD: The United Arab Emirates has confirmed financial support of $1 billion to Pakistan, the South Asian nation’s finance minister said on Friday, removing a key hurdle to securing a much-awaited bailout tranche from the International Monetary Fund (IMF).
The commitment is one of the IMF’s last requirements before approving a staff-level pact to release a tranche of $1.1 billion, delayed for months, that is crucial for Pakistan to resolve an acute balance of payments crisis.
“The State Bank of Pakistan is now engaged for needful documentation for taking the said deposit from UAE authorities,” Finance Minister Ishaq Dar said on Twitter, referring to the central bank.
The pledge makes the UAE the third country, after Saudi Arabia and longtime ally China, to come to Pakistan’s assistance, as external financing is needed to fully fund the balance of payments gap for the fiscal year that ends in June.
“The UAE deal should be helpful because the IMF has been saying Pakistan should secure financing from ‘friendly’ nations,” said Seaport Global EM credit analyst Himanshu Porwal.
“It is still far from over though. The IMF is saying that they (Pakistan) are in breach of certain targets. The fiscal deficit for example is seen peaking at around 8.3 percent (of GDP), so almost double what they were expecting,” he added.
Pakistan’s bonds, which have slumped nearly 70 percent over the last year as the country’s troubles have mounted, climbed for a second day running on the confirmation. The rise was almost 5 percent for its bond with closest payment date – April 15 next year – taking it to almost 50 cents in the dollar, compared to 46 cents a few days ago.
On Thursday, the IMF’s managing director, Kristalina Georgieva, said the fund was also in talks with nations friendly to Pakistan to secure financial assurances vital for the program.
Last week, Saudi Arabia also told the IMF it would provide financing of $2 billion to Pakistan.
Pakistan’s foreign exchange reserves have fallen to cover barely a month of imports after the IMF funding stalled in November, hit by snags over fiscal policy adjustments after officials of the lender visited Islamabad in February for talks.
They formed part of a ninth review exercise on a bailout package of $6.5 billion agreed in 2019 whose resumption is critical for Pakistan to avoid risking default on external payment obligations.
POLICY AND FISCAL MEASURES
Pakistan had to complete actions demanded by the IMF, such as reversing subsidies in its power, export and farming sectors, hikes in the prices of energy and fuel, and a permanent power surcharge, among other measures.
These steps included jacking up its key policy rate to an all-time high of 21 percent, a market-based exchange rate, arranging for the external financing, and raising more than 170 billion rupees ($613 million) in new taxes.
The fiscal adjustments have already fueled Pakistan’s highest inflation ever, which climbed in March to more than 35 percent on the year.
A final issue to be resolved is a fuel pricing scheme meant to bring relief to Pakistan’s lower middle class and poor from crippling inflation. The IMF has asked how it will be funded.
The IMF program will disburse another tranche of $1.4 billion to Pakistan before it concludes in June.
Funds from the lender will also unlock other bilateral and multilateral financing for the cash-strapped country.
Neighboring China has rolled over $2 billion and refinanced another $1.3 billion in recent weeks.
On Friday, Pakistan’s central bank is set to receive a third and final disbursement of $300 million from the refinancing by the Industrial and Commercial Bank of China, Dar added.
Program loans from other multilateral agencies await completion of the IMF review, central bank governor Jameel Ahmad told investors in Washington at the spring meetings of the lender and the World Bank.
Measures such as a hike of 1,400 basis points in interest rates over the last 18 months have put the nation of 220 million on a path to macroeconomic stability, added Ahmad, who hoped for inflation to start decelerating over the next few months.
The government is pursuing a contractionary fiscal policy, with the primary balance in surplus so far compared to a deficit last year, he added.
Pakistan gets closer to IMF deal after UAE pledges $1 billion
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Pakistan gets closer to IMF deal after UAE pledges $1 billion
- The country’s dollar-denominated government bonds firm after the cash pledge by the Arab country
- Last week, Saudi Arabia also told the global lender it would provide $2 billion in financing to Pakistan
Pakistan condemns India’s ‘unprovoked’ military action in meeting with British foreign secretary
- David Lammy is on his first official visit to Islamabad amid tensions following India-Pakistan standoff
- Pakistan and UK express satisfaction over bilateral economic cooperation, development partnership
ISLAMABAD: Pakistan on Friday condemned what it called India’s “unprovoked and belligerent” military action during talks with British Foreign Secretary David Lammy, saying Islamabad had only exercised its right to self-defense with a limited response aimed at avoiding civilian casualties.
The meeting between Lammy and Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar took place in Islamabad during Lammy’s first official visit to the country. It came just days after one of the most serious military confrontations between the South Asian nuclear-armed rivals in decades.
Fighting erupted last week when India launched strikes on what it said were “terrorist camps” in Pakistan following a deadly April attack in Indian-administered Kashmir that killed 26 people. New Delhi accused Islamabad of backing the militants behind the assault, an allegation Pakistan denies.
Four days of drone, missile and artillery exchanges followed, killing around 70 people, including dozens of civilians, on both sides of the border. The conflict raised fears of a broader war before a ceasefire was announced by US President Donald Trump.
“The two leaders held detailed discussions on recent developments in South Asia, particularly the situation following the ceasefire understanding between Pakistan and India,” said a statement released by the foreign office in Islamabad.
“Dar briefed the UK Foreign Secretary on India’s unprovoked and belligerent actions, which constituted a violation of Pakistan’s sovereignty, international law, the UN Charter, and established norms of interstate relations,” it continued.
“He underlined that Pakistan exercised its right to self-defense under Article 51 of the UN Charter, and that Pakistan’s response remained limited, precise, and proportionate, with utmost care taken to avoid civilian casualties,” the statement added.
Dar also thanked the United Kingdom for its constructive engagement in urging de-escalation during the conflict.
Britain was among several countries that called for restraint, with Prime Minister Keir Starmer saying at the time that the UK was “urgently engaging” with both sides.
The two officials also discussed Pakistan-UK bilateral ties, expressing satisfaction with the progress in trade, economic cooperation and development partnerships.
Dar acknowledged British support in key areas such as education, health and climate resilience, and both sides pledged to deepen collaboration on global challenges including climate action and sustainable development.
Lammy’s visit, the foreign ministry said, underscored the “robust and multifaceted partnership” between the two nations and their commitment to regional and international peace.
With input from AFP
Pakistan moves to cut import tariffs in bid to boost exports, attract investment
- Pakistani exports rely heavily on imported inputs, making import duties important for export competitiveness
- Government plans to phase out additional customs and regulatory duties in Pakistan in the next five years
KARACHI: Pakistan on Friday approved a major reduction in import tariffs as part of its broader effort to revive the economy, boost exports and attract foreign investment, an official statement circulated by the Prime Minister’s office said.
The move comes as Pakistan emerges from a prolonged economic crisis and shifts from restrictive import controls, previously used to protect dwindling foreign currency reserves, toward policies aimed at sustaining growth and attracting investment. With inflation easing and macroeconomic indicators improving, the government is working on tariff reforms to boost industrial productivity.
Pakistani exports, especially in textiles, engineering and pharmaceuticals, rely heavily on imported inputs, making import duties a key factor in export competitiveness. The issue came up for decision during a high-level meeting on the National Tariff Policy, chaired by Prime Minister Shehbaz Sharif in Islamabad.
“In line with the government’s economic recovery plan, the prime minister has taken a historic step by approving a gradual but significant reduction in import tariffs,” the statement said, calling it “a key milestone” in achieving economic stability and enabling export-led growth.
Under the approved changes, Pakistan will phase out additional customs duties, currently ranging from two to seven percent, along with regulatory duties, between five and 90 percent, over the next four to five years.
The government will also cap general customs duties at 15 percent, compared to current rates that sometimes exceed 100 percent, and limit tariff slabs to four categories to reduce complexity and ensure a level playing field across industries.
The policy shift is expected to support the government’s goals of curbing unemployment, containing inflation further and providing dignified employment opportunities, particularly for educated youth.
Sharif also ordered the formation of an implementation committee to oversee the rollout of the tariff reforms and reiterated that economic revival remained his administration’s top priority.
Pakistan says agreed with India on ‘phased de-escalation’ after last week’s strikes
- The latest conflict between India and Pakistan had sparked global concerns that it could spiral into a full-blown war
- Four days of intense drone, missile and artillery strikes left around 70 people, including civilians, dead on both sides
ISLAMABAD: Pakistan has agreed with India for “phased de-escalation” after last week’s military conflict between the nuclear-armed neighbors, the Pakistani foreign office said on Friday, adding that military officials from both countries had been in “periodic contacts.”
The latest conflict between India and Pakistan had sparked global concerns that it could spiral into a full-blown war before a ceasefire was announced by United States President Donald Trump. Fighting began when India launched strikes on May 7 against what it called “terrorist camps” in Pakistan following an April attack in Indian-administered Kashmir which killed 26 people.
New Delhi blamed Islamabad for backing the militants it claimed were behind the attack — the deadliest on civilians in Kashmir in decades. Pakistan denies the charge and has demanded a credible, international probe into the assault. Four days of intense drone, missile and artillery exchanges left around 70 people, including dozens of civilians, dead on both sides.
Speaking at a press briefing in Islamabad, Pakistani foreign office spokesman Shafqat Ali Khan said the ceasefire between both nations was achieved through “facilitation of several friendly nations,” reiterating Islamabad’s support for President Trump’s announcement of engaging with Pakistan and India to seek a resolution to the Kashmir dispute.
“I would like to highlight that Directors General of Military Operations of Pakistan and India have maintained periodic contacts since 10th May 2025. Both sides have agreed on a structured mechanism for phased de-escalation,” he said, adding that Pakistan was committed to the ceasefire.
“As a goodwill gesture, Pakistan handed over an Indian Border Security Force constable on May 14, 2025. In return, India released a sepoy of Pakistan Rangers.”
There was no immediate response from New Delhi to Khan’s statement but it came hours after Indian Defense Minister Rajnath Singh said the International Monetary Fund (IMF) should reconsider a one-billion-dollar loan to Pakistan, alleging Islamabad was “funding terror.” Both India and Pakistan, who are members of the International Atomic Energy Agency, have also accused each other of failing to control their nuclear weapons.
“I believe a big portion of the $1 billion coming from IMF will be used for funding terror infrastructure,” Singh told troops at an air force base in western India. “I believe any economic assistance to Pakistan is nothing less than funding terror.”
The IMF last week approved a loan program review for Pakistan, unlocking a $1 billion payment which the state bank said has already been received. A fresh $1.4 billion loan was also approved for Pakistan under the IMF’s climate resilience fund.
Khan said at a time when the international community was actively promoting regional peace and stability, India’s rhetoric reflected a “persistent tendency to distort facts, justify aggression, and cast unwarranted aspersions” on Pakistan’s nuclear assets.
“Pakistan as a responsible state remains committed to the ceasefire and to taking necessary steps toward de-escalation and regional stability,” he said.
“Given India’s belligerent posture, we call upon our international partners to ensure that India honors its commitments and refrains from further aggression. Should India resume hostilities, Pakistan will have no choice but to respond.”
Bitter rivals India and Pakistan have fought three wars, including two over the disputed region of Kashmir, since gaining independence from British rule in 1947. Both claim the Himalayan territory in its entirety but rule it in part.
India has long battled an insurgency on the side it rules by armed separatists fighting for independence or a merger with Pakistan. New Delhi accuses Pakistan of backing the militants, Islamabad says it only offers political and diplomatic support to the Kashmiris.
The region has long been described as the “nuclear flashpoint” of South Asia and prompted President Trump last week to offer Washington’s mediation to resolve the issue.
“Pakistan firmly believes in peaceful coexistence. We prioritize dialogue and diplomacy over conflict and confrontation. We have consistently advocated for meaningful engagement and result-oriented dialogue to resolve all outstanding issues, including the core dispute of Jammu and Kashmir,” Khan said.
“A just and peaceful settlement of these disputes remains indispensable for lasting peace in South Asia.”
India has for years insisted Kashmir is a bilateral issue and not allowed any third-party mediation.
UK, Pakistan foreign ministers meet after India conflict
- The conflict between nuclear-armed neighbors India, Pakistan sparked global concerns that it could spiral into a full-blown war
- Four days of intense drone, missile and artillery exchanges, killed around 70 people, including dozens of civilians, on both sides
ISLAMABAD: UK Foreign Secretary David Lammy met with his Pakistani counterpart in Islamabad on Friday, a week after the country’s most serious military confrontation with India in decades.
The latest conflict between nuclear-armed neighbors India and Pakistan had sparked global concerns that it could spiral into a full-blown war before a ceasefire was announced by United States President Donald Trump.
Lammy was received by Pakistan’s Foreign Minister Ishaq Dar at the Foreign Office, images broadcast by state television showed.
The United Kingdom was among several nations to urge de-escalation after last week’s clashes, and Prime Minister Keir Starmer said at the time that Britain was “urgently engaging” with both countries.
Iran’s Foreign Minister Abbas Araghchi and Saudi Arabia’s Minister of State for Foreign Affairs, Adel Al-Jubeir, separately visited both countries last week offering to mediate.
Fighting began when India launched strikes on May 7 against what it called “terrorist camps” in Pakistan following an April attack in Indian-administered Kashmir which killed 26 people.
New Delhi blamed Islamabad for backing the militants it claimed were behind the attack — the deadliest on civilians in Kashmir in decades. Pakistan denies the charge.
Four days of intense drone, missile and artillery exchanges ensued, leaving around 70 people, including dozens of civilians, dead on both sides.
Both India and Pakistan are members of the International Atomic Energy Agency and have accused each other of failing to control their nuclear weapons.
Flydubai begins operations in Pakistan’s northwest as first flight lands in Peshawar
- Peshawar is one of the oldest cities in South Asia, which features several cultural and historical landmarks
- Flydubai will operate daily flights between Dubai and Peshawar, offering customers ‘more options for travel’
ISLAMABAD: Flydubai, an Emirati government-owned airline, has launched its daily flights to the northwestern Pakistani city of Peshawar, the Pakistani Airports Authority (PAA) said on Friday.
Peshawar in Pakistan’s northwestern Khyber Pakhtunkhwa province has a rich history that makes it one of the oldest cities in South Asia. Peshawar features cultural landmarks like the historic Bala Hisar Fort and the Qissa Khwani Bazaar, which once served as a gathering places for traders and poets.
The inaugural flydubai flight arrived at Peshawar’s Bacha Khan International Airport at around 12:30am on Friday, carrying 164 passengers, according to the PAA. It was given a water cannon salute upon arrival at the airport, followed by a ceremony to mark the start of airline operations in Peshawar.
“Flight FZ-375 departed back to Dubai at 2:20am with 184 passengers,” the PAA said in a statement. “Flydubai will operate seven flights a week.”
Flydubai has built a growing network of more than 130 destinations, 97 of which were underserved markets and did not previously have direct air links to Dubai, according to the airline, which has a fleet of 89 Boeing 737 aircraft.
The airline first started operating flights to Pakistan in 2010 with the launch of flights to the southern port city of Karachi. In addition to Islamabad and Lahore, the carrier also flies to Faisalabad, Multan, Quetta and Sialkot cities of Pakistan.
Flydubai this month said its flights to Peshawar airport will operate from Terminal 2 at Dubai International (DXB).
“Flydubai will operate a daily service between Dubai and Peshawar, offering customers from the UAE and the region more options for travel,” it said.
