- The IMF wants Pakistan to make up for a $6 billion deficit.
- Failure to materialize could push Pakistan towards default.
- The IMF wants to find out why Pakistan’s bilateral partners are unwilling to honor their commitments.
ISLAMABAD: Pakistan looks to Gulf states that promised to fill financing gap as International Monetary Fund (IMF) seeks confirmation before approving ninth review, reported The news.
According to the publication, the IMF’s condition for Pakistan to close the $6 billion gap is merely an attempt to ensure its credibility. Failure to materialize could push Pakistan towards default.
Now all eyes are on the Kingdom of Saudi Arabia (Saudi Arabia), the United Arab Emirates And Qatar to bail out Pakistan’s struggling economy.
An official, who spoke to the publication on condition of anonymity, said Pakistan had the only option to wait and pray for confirmation from bilateral partners in the Gulf region.
According to the report, the Fund was forced to put this condition on the negotiating table largely because the representatives of these countries on the Board of Directors had committed themselves before the approval of the seventh and eighth reviews to provide assistance finance in Islamabad in different forms. These included additional deposits and investments.
However, they have failed to deliver on their commitments despite several months having passed during the current fiscal year.
“In such a scenario, the IMF has placed the ball in Pakistan’s court to secure 100% commitment from bilateral partners before moving on to signing a Staff Level Agreement (SLA),” sources confirmed. To The news THURSDAY.
The Fund has informed Islamabad that its credibility will also be at stake if the staff level deal is finalized and if Pakistan fails to materialize its commitment from bilateral partners, it could tip the country into the default zone.
According to the publication, the Fund wants to find out the reasons why Pakistan’s bilateral partners are unwilling to fulfill their previous commitments. Under such circumstances, the nod from Saudi Arabia, the UAE and Qatar can only help Islamabad reach a personnel deal, the sources said.
Only China had come forward to save Islamabad by fulfilling its commitments on the refinancing of its commercial loans as well as the rollover of its SAFE deposits. Pakistan had requested the renewal of SAFE deposits of $2 billion which would come due next week.
Meanwhile, Finance Minister Ishaq Dar announced on Thursday that the documentation for the disbursement of a $500 million commercial loan from the Industrial and Commercial Bank of China (ICBC) had been completed for the release of funds.
“On China’s ICBC-approved $1.3 billion rollover facility (which was previously repaid by Pakistan in recent months), documentation for the second disbursement of $500 million has been completed by the ministry. of Finance for the release of funds for the benefit of the State Bank of PakistanIshaq Dar tweeted.
Chinese commercial banks, including China Development Bank (CDB) and ICBC, had already refinanced commercial loans of $700 million and $500 million respectively in the recent past. Now another $500 million installment will roll over on Friday (today) or next week. After securing a $500 million refinance from ICBC, total commercial loans refinanced will be $1.7 billion.
There was a total of $2 billion in commercial loans that were repaid by Pakistan a few months ago, and China has pledged its commercial banks to refinance its loans.
“Now the final tranche of a $300 million commercial loan from ICBC is expected to be refinanced in the coming weeks,” the sources said.