Pakistan will draw $5.6 billion in financing, Bloomberg News reported on Friday, an amount that includes inflows from Saudi Arabia and the United Arab Emirates (UAE) that have been deposited in the country’s central bank. Inflows from the International Monetary Fund (IMF) are not part of this financing.
The funding “includes $3.7 billion of commitments from bilateral partners including Saudi Arabia and the UAE”, Nathan Porter, the IMF’s mission chief for Pakistan, was quoted as saying in an emailed response to Bloomberg News.
Some $3 billion has been disbursed, Porter said, referring to the inflows from the two Gulf countries as confirmed by Finance Minister Ishaq Dar earlier this week.
This essentially leaves $700 million of commitments that have yet to materialise as inflows from bilateral partners.
Recent developments have helped Pakistan’s depleting foreign exchange reserves that dropped to nearly $4 billion earlier this month.
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Additionally, “more inflows are expected from multilateral development partners including the World Bank, Asian Infrastructure Investment Bank and Islamic Development Bank in the coming weeks and months, Bilal Kayani, Prime Minister’s coordinator on the economy, said in a Twitter post.
In addition to the support from bilateral and multilateral partners/institutions, Pakistan – contingent on the two reviews of the IMF’s Stand-By Arrangement (SBA) – will also see a cumulative inflow of $1.8 billion from the Washington-based lender. A first tranche of nearly $1.2 billion has already landed in the account of the State Bank of Pakistan.
Financing assurances
Securing financing commitments, reportedly of around $6 billion, was a major hurdle in reviving the now-defunct IMF’s Extended Fund Facility. The programme remained stalled at the ninth review for months with not nearly enough financing commitments coming through to convince the IMF to move ahead on Pakistan’s bailout.
However, in a major breakthrough for Islamabad, the government managed to see an upgraded version of the EFF by first securing a staff-level agreement for a new, nine-month SBA before the IMF Executive Board also gave its green signal to the $3-billion programme.