ISLAMABAD/WASHINGTON—Pakistan’s Minister of State for Finance and Revenues, Dr. Aisha Ghaus Pasha, has announced that the International Monetary Fund’s deal with Pakistan will be unlocked once the UAE provides funding assurance as demanded by the global lender. In a statement released on Wednesday, Dr. Pasha confirmed that the IMF is currently assessing the commitment of friendly countries to financing Pakistan before disbursing fresh funds to the South Asian nation.
According to Dr. Pasha, the IMF has confirmed that Saudi Arabia will deposit an additional $2 billion to Pakistan. In addition, Islamabad is currently in talks with Saudi Arabia, UAE, China, and Qatar for additional funds, with negotiations underway for $1 billion in financing from the UAE. Dr. Pasha emphasised that the deal with the global lender is expected to be signed after receiving the funding assurance from the UAE.
Pakistan has been in negotiations with the IMF since January to release $1.1 billion from a $6.5 billion bailout package agreed upon in 2019. To unlock the funding, the government has increased the interest rate by 3%, removed an artificial cap on the exchange rate, implemented additional taxes, and raised fuel prices. The IMF had demanded a written guarantee from friendly countries for the deposit, and sources suggest that Saudi Arabia and the UAE had sought some time to assure the IMF regarding the deposit.
The funding assurance from the UAE is expected to provide much-needed financial relief to Pakistan, which is facing economic challenges due to the COVID-19 pandemic and is struggling to repay mounting debt. The finalisation of the IMF deal will enable Pakistan to receive fresh funds to stabilise its economy and continue its efforts towards economic growth.