Panic in Pakistan government as UAE demands its $1 billion back

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New Delhi: Top officials of the Pakistan government are in panic mode after the United Arab Emirates (UAE) has demanded its one billion dollars back. 

The one billion dollars are deposited with the State Bank of Pakistan (SBP), the central bank of the country. The deadline to return back $1 billion is March 12. The money has been demanded as the amount has reached its maturity.

Meanwhile, multiple attempts have been made to reach out to UAE, especially to Crown Prince by top Pakistani officials. There hasn't been any response so far.

Pakistan has pleaded UAE that returning such a huge amount can impact its economic situation at present.

It is no secret that Pakistan's economy is in dire straits. According to the World Bank estimate, amid the COVID-19 pandemic, Pakistan’s real GDP growth is estimated to have declined from 1.9 per cent in FY19 to -1.5 per cent in FY20.

Earlier this year, IMF and Pakistan reached a staff-level agreement to release $500 million as part of the larger loan pact. 2019 saw the international financial institution agreeing to provide a $6 billion loan to the country to rein in the debt crisis in exchange for reform measures.