ISLAMABAD, AUGUST 7: On Wednesday, Pakistan has obtained debt rollover guarantees from China, Saudi Arabia, and the United Arab Emirates (UAE) for a year.
Pakistan and the IMF last month came to an agreement at the staff level for a fresh $7 billion loan program.
However, it was stated that the country in South Asia required financial guarantees from bilateral donors in order to receive the final approval from the IMF board for the new bailout.
On Tuesday, “Pakistan has secured commitments to roll over debt for a year from China, Saudi Arabia, and the United Arab Emirates.” “Pakistan has been the recipient of bilateral loans totaling $12 billion for the past few years.”
Finance Minister Muhammad Aurangzeb stated, “We are quite hopeful that the staff-level agreement will be converted into a board approval by the end of the month,” on Tuesday at an event in Islamabad.
Aurangzeb as stating that the number of rollovers would remain unchanged from the previous year.
Aurangzeb anticipated that the current Pakistani government would be able to handle a $5 billion funding gap during the course of the IMF’s three-year program. With a stable currency, he thought Pakistan was headed in the right path.
A deal for a 37-month financing package was agreed in July between Pakistan and the International Monetary Fund.
Pakistan has been severely dependent on IMF programs for many years. At times, it has been on the verge of sovereign default and has had to resort to Saudi Arabia and the United Arab Emirates for financial assistance in order to satisfy the IMF’s requirements for external finance.
The new Extended Fund Facility program is contingent upon securing approval from its executive board and receiving “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners,” according to a statement released by the IMF subsequent to the staff level agreement with Islamabad.
