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Wednesday April 24, 2024

Pakistan secures UAE's confirmation for unlocking IMF deal

“UAE authorities have confirmed to IMF for their bilateral support of [$1] billion to Pakistan,” Dar announces

By Saifur Rahman
April 14, 2023
An undated image of $100 and $50 dollar stacks placed on a table. — AFP
An undated image of $100 and $50 dollar stacks placed on a table. — AFP

ISLAMABAD: The United Arab Emirates (UAE) authorities have told the International Monetary Fund (IMF) it will provide financing to Pakistan, Finance Minister Ishaq Dar announced on Friday, rekindling hopes of an early signing of the agreement.

“UAE authorities have confirmed to IMF for their bilateral support of [$1] billion to Pakistan,” Dar announced on Twitter.

The finance minister added that the State Bank of Pakistan is now engaged for needful documentation for taking the said deposit from UAE authorities.

Last week, the Washington-based Fund has conveyed to Pakistan that it has received confirmation from Saudi Arabia on $2 billion in additional deposits.

The IMF has indicated it has received the assurance from Riyadh, State Minister for Finance Aisha Ghaus Pasha told reporters in Islamabad last week.

Saudi Arabia's $2 billion and UAE’s $1 billion pledged in external financing support to Pakistan is one of the final conditions for an IMF deal that Islamabad needs to avert a default.

Pakistan has less than a month's worth of foreign exchange reserves and is awaiting a bailout package of $1.1 billion from the IMF that has been delayed since November over issues related to fiscal policy adjustments. 

IMF chief hopeful of Pakistan avoiding default

A day earlier, IMF Managing Director Kristalina Georgieva said that Pakistan had not reached the default level yet.

Georgieva, while addressing a news conference on the spring meeting of Breton Wood Institutions at the Washington-based Fund headquarters, said the Fund was securing confirmation from international partners to meet the financing gap requirements of Pakistan.

In response to a question regarding the looming default risk facing Pakistan, she said: “Pakistan had not yet reached that level and it would not but the country required a sustainable policy framework to avert such risks”.

She said the lender has been working very hard with the authorities in Pakistan within the context of the current programme to make sure the country has the policy framework in place to prevent reaching the point of unsustainable debt.

“My hope is that with the goodwill of everyone, and the implementation of what has been already agreed by the Pakistan authorities, we can complete our current programme successfully,” Georgieva maintained.