ISLAMABAD: Saudi Arabia and the United Arab Emirates (UAE) have intimated the International Monetary Fund (IMF) of their willingness to provide financing to Pakistan. This was claimed by Finance Minister Senator Ishaq Dar after several rounds of talks between the countries to break an impasse on the ninth review of the Extended Fund Facility (EFF) bailout package, while the tenth review is looming.
In a statement to a news channel, Dar confirmed that KSA has committed to providing $2 billion to Pakistan, while the UAE has committed to $1 billion. The Finance Minister stated that all preconditions for a Staff Level Agreement (SLA) between Pakistan and the IMF have now been implemented, expressing hope that the IMF will soon sign the agreement and obtain approval from its executive board.
The development came after Ishaq Dar previously met virtually with Martin Raiser, the South Asia Vice President of the World Bank, during the World Bank-IMF Spring Meetings 2023 held in Washington. The IMF funding stalled in November 2022, after officials of the lender visited Islamabad in February for talks. The country’s foreign exchange reserves have since fallen to cover only a month of imports.
It is important to mention here that in order to avoid the risk of default on external payment obligations, Pakistan had to complete several actions demanded by the IMF, including reversing subsidies in its power, export, and farming sectors, increasing the prices of energy and fuel, and imposing a permanent power surcharge, among other measures.
The IMF programme will disburse another tranche of $1.4 billion to Pakistan before concluding in June of this year. The resumption of the bailout package, worth $6.5 billion and agreed upon in 2019, is critical to Pakistan’s economic stability.
