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Saturday, June 10, 2023

Closing the financial gap with $4 billion from friendly countries

Saudi Arabia is the prior most country that has consented to give commitment to the IMF, according to a senior government official

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The IMF was reported last month to be looking to assess Saudi Arabia’s commitment to financing Pakistan before disbursing funds to the country. IMF wanted to ensure that Saudi Arabia will follow through with as much as $4 billion in funding to Pakistan to ensure Islamabad does not have a financing gap after the IMF loan.

Acting Governor State Bank of Pakistan Dr Murtaza Syed shared that Pakistan is set to get assurances of a total of $4 billion additional financing from friendly countries this week that will strengthen the revival of the International Monetary Fund (IMF) programme.

Read more: Last step taken towards the IMF bailout programme

Saudi Arabia is the prior most country that has consented to give commitment to the IMF, according to a senior government official.

Finance Minister Miftah Ismail also confirmed to a private news agency that at least one country has given assurance to the IMF.

The governor’s and finance minister’s statements came on the heels of the IMF’s announcement that the global lender will convene a board meeting to approve Pakistan’s request for the programme’s revival once it has secured assurances for the $4 billion financing.

These assurances will pave the way towards betterment in the economy and give strength to the government as well as central bank to cope with the economic crisis.

According to Dr. Murtaza Syed, the executive directors (of the friendly countries) only need to make a call to Pakistan’s Mission Chief and confirm that they are willing to give a specific amount for a period of 12 months.

The UAE was more interested in potentially attaining some assets, and Saudi Arabia is willing to provide loans as well as oil on deferred payments.

According to the acting governor, arranging $4 billion in financing is the responsibility of both Pakistan and the IMF, but the burden is heavier on us because we require the funds. He added that the IMF is also assisting Pakistan in obtaining these guarantees.

Dr Syed said that against the estimated $34 billion external financing requirements, Pakistan has already lined up $36 billion and the additional $4 billion demand is for increasing the foreign exchange reserve.