Pakistan Secures $7 Billion IMF Loan with Support from China Saudi Arabia UAE
Pakistan last month reached a staff-level agreement with the IMF for a new $7 billion loan program.
However, the South Asian nation reportedly needed financing commitments from bilateral donors to get a final nod from the IMF board for a fresh bailout.
“Pakistan has secured commitments from China, Saudi Arabia, and the United Arab Emirates to roll over debt for a year,” a Bloomberg report said on Tuesday. “Pakistan has $12 billion in bilateral loans that have been extended for the past few years.”
“We are quite hopeful that the staff-level agreement will be converted into a board approval by the end of the month,” Finance Minister Muhammad Aurangzeb said while addressing an event in Islamabad on Tuesday.
Bloomberg quoted Aurangzeb as saying that the amount of rollovers would be the same as last year.
Aurangzeb expected the incumbent Pakistani government to manage a $5 billion financing gap during the IMF’s three-year program, according to Bloomberg. He believed that Pakistan was moving in the right direction with a stable currency.
Pakistan and the International Monetary Fund reached an agreement for a 37-month loan program in July.
Pakistan has relied heavily on IMF programs for years, at times nearing the brink of sovereign default and having to turn to countries such as the United Arab Emirates and Saudi Arabia to provide it with financing to meet external financing targets set by the IMF.
The IMF in its statement following the staff-level agreement with Islamabad said the new Extended Fund Facility programme was subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.
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