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Pakistan

IMF wants assurance on Saudi funding to Pakistan before it disburses loan: report

  • Washington-based lender wants to ensure Riyadh follows through with as much as $4bn funding to Pakistan
Published July 20, 2022

The International Monetary Fund (IMF) is looking to assess Saudi Arabia’s commitment to financing Pakistan before the multilateral lender disburses fresh funds to the country, Bloomberg reported, citing people familiar with the matter.

The Washington-based lender wants 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, the report added, citing the people who asked not to be identified discussing private deliberations. The transfer could include special drawing rights, the Bloomberg report added.

The development comes as Pakistan desperately seeks fresh funds, including those from the IMF, to help manage a worsening economic crisis that has seen the rupee hit fresh lows throughout the ongoing week.

Many believe the IMF's $1.2 billion alone is not sufficient for Prime Minister Shehbaz Sharif’s government to avoid a debt default.

The report coincides with Pakistan’s bonds also sinking, effectively making international markets too expensive for the government.

Pakistan needs at least $41 billion in the next 12 months to fund debt repayments and boost foreign exchange reserves, Finance Minister Miftah Ismail had said earlier.

Just days ago, Miftah said Pakistan is likely to get $4 billion from friendly countries this month to bridge a gap in foreign reserves highlighted by the IMF, two days after sealing a deal with the lender.

Pakistan to get $4bn from friendly countries to shore up reserves: Miftah Ismail

"We will, God willing, fill this gap in the month of July," he had said. "We think that we will get $1.2 billion in deferred oil payment from a friendly country. We think that a foreign country will invest between $1.5 to $2 billion in stocks on a G2G (government-to-government) basis, and another friendly country will perhaps give us gas on deferred payment and another friendly country will make some deposits."

The IMF announced its staff-level agreement with Pakistan on July 16, a development that paves the way for a disbursement of $1.17 billion, subject to approval of its board.

Comments

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Hussain Naqvi Jul 20, 2022 08:54pm
AslamoAlikum: The general public of our nation doesn't understand debt default. Most of the financial experts are informing the people through print & electronic media that we are heading towards debt default. Nation must prepare before it happens.
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Syed Arif Hussain Zahidi Jul 20, 2022 09:25pm
PLEASE KEEP KHAN FAR FAR AWAY FROM THE GOVERNMENT, KHAN SOLD ALL HIS GIFTS AND POCKETED THE MONEY, HOW CAN THE SAUDO CROWN PRICE TRUST HIM ...
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Gerneral Jul 21, 2022 12:12am
What the hell more delays more pressure on economy https://www.techapkzone.com/
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Pakistani1 Jul 21, 2022 05:04am
Is there end to the demands? One thing is for sure that if this government was indeed brought in by US, IMF would not keep adding conditions!
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Syed Arif Hussain Zahidi Jul 21, 2022 10:29am
This demand is because they don't trust Khan and Pti Govt. Once bitten twice shy. This demand depends on the rlection results of Punjab Govt. In case PMLN is elected the demand disappears and in case pti is elected, then this will automatically disappear and funds shall be blocked as Saudi Arabia will definitely not invest with Khan or PTI, they know too well how Khan sold their gifts. MAYBE I AM WRONG.
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Syed Sabihullah Jul 21, 2022 02:16pm
No doubt, we have been defaulted. Time is near to sell pakistani assets to foreigner or otherwise take it control. Half country part will be given to china, remaining will be shared between India, Iran, Afghanistan.
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Faisal Iqbal Jul 21, 2022 04:58pm
@Syed Arif Hussain Zahidi, wow.Patwari lgtay aap
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NASIR Jul 23, 2022 05:32pm
Why IMF funding continuesly to PAKISTAN whether the funds could not have an example of utilization for betterment of Pakistani People. Billions of Dollors are return back to swiss, UK,USA,Spainish, banks and in the form of abroad property by the Politicians,Civil ,militry and judicial personalities of Pakistan. for God sake control such as practice of corruption involvement by IMF, our poor peoples are suffering by this strategy. and USA who was our friend country now going to inverse due to recent crises. No more funding without intact old amount and its accountability
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juhu Jul 25, 2022 09:21am
The Khan is demanding fresh elections putting political pressure to hold fresh elections and IMF is seeking guarantee from Saudi before dispersing the first instalment of the loan. How Saudi can give guarantee to IMF that it will finance the debt after the loan is dispersed. IMF will roll out the first installment providing the relief followed by Saudi and china coming to the rescue. I hope this money don't end up in the affluent pockets. There is a chance that IMF will not Pak default on it's loan. Pakistan has to sell all it's public assets if it's bankrupting the Government. The Pakistan need to exploit on their granite business which is available in plenty and some IVY league educated Pak Economist should advise the finance ministry to close the trade imbalance. I don't think it's a rocket science to find a solution to come out of this situation. Pakistan need to realize the importance of political stability which would devise a system to put the country on progress. IMF can't keep adding conditions to disperse the loan. I hope the Paks will come out of this unfortunate situation.
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