Additional deposits of $2bn: Saudi assurance received, IMF tells Pakistan

ISLAMABAD: With the possibility of getting confirmation from the Kingdom of Saudi Arabia on $2 billion additional deposits, Pakistan is now anxiously waiting for securing verification from the UAE on an additional $1 billion deposit for moving towards a staff-level agreement with the International Monetary Fund (IMF).

Top official sources confirmed to The News on Wednesday that the IMF had conveyed to Pakistani authorities that they had secured confirmation on the provision of $2 billion in additional deposits from the Kingdom of Saudi Arabia (KSA) and the Fund staff seemed largely satisfied with the latest confirmation.

Now the KSA high-ups are all set to make a public announcement, probably during the upcoming visit of Prime Minister Shehbaz Sharif to the Kingdom.

The KSA ambassador in Pakistan had also hinted recently during an interview with a web-based newspaper that his country had always supported Pakistan in critical situations and good news would be shared soon, InshaAllah.

“Now all eyes are focused on the UAE for getting confirmation on another $1 billion deposit from them, which may pave the way for striking the staff-level agreement (SLA) with the IMF,” added the sources.

However, there was still another stumbling block in the way of signing the SLA with the IMF as the Ministry of Petroleum, in consultation with the PM Office, had announced an unplanned cross-fuel subsidy for owners of motorcycles and cars up to 800cc, which needed to be scrapped at this stage. The government, according to the sources, has not yet withdrawn the proposed cross-fuel subsidy, which cannot be implemented in a half-baked manner.

Such schemes were considered in the past during the tenure of former finance minister Shaukat Tarin and even during the era of the PDM-led government when Miftah Ismail had the charge of the Ministry of Finance.

Even Miftah Ismail had allocated Rs48 billion on the eve of the last budget in the name of Sasta Petrol, but it could not be implemented because such schemes could not be designed properly.

The announcement of a half-baked cross-fuel subsidy had provided an excuse to the IMF for delaying the SLA signing, as they were still raising questions for getting more details to ascertain how the scheme was going to be implemented in a transparent manner.

Meanwhile, Minister for Finance Ishaq Dar is scheduled to lead an official delegation for attending the upcoming annual spring meetings of the IMF and World Bank, but so far his meetings with the bilateral and multilateral partners on the sidelines of Breton Wood Institutions (BWIs) was not finalised and confirmed.

It is yet to be seen how Pakistan and the IMF move ahead with the completion of the Extended Fund Facility (EFF) programme even if the pending 9th Review got accomplished because the existing EFF programme would expire on June 30, 2023. There is one possibility of extending the programme period by three to six months, but nothing is discussed and finalised so far, added the officials.