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Finance Minister Ishaq Dar revealed on Friday that the United Arab Emirates (UAE) authorities have informed the International Monetary Fund (IMF) of their intention to provide $1 billion in assistance to Pakistan.
The move will allow Pakistan to obtain the vital $1.1 billion loan tranche from the IMF, which was awaiting clearance from foreign partners to meet Pakistan’s financial gap requirements.
“UAE authorities have confirmed to IMF for their bilateral support of [$1] billion to Pakistan,” Dar said on Twitter.
The finance minister went on to say that the State Bank of Pakistan (SBP) is presently completing the necessary paperwork to accept the deposit from the UAE authorities.
The Washington-based Fund informed Pakistan last week that it had received confirmation from Saudi Arabia on $2 billion in fresh deposits.
“The IMF has indicated that it has received assurance from Riyadh,” State Minister for Finance Aisha Ghaus Pasha told reporters last week in Islamabad.
One of the final conditions for an IMF deal that Islamabad requires to avoid default is Saudi Arabia’s $2 billion and the UAE’s $1 billion pledged in external funding help to Pakistan.
Pakistan has less than a month’s worth of foreign exchange reserves and is awaiting a $1.1 billion bailout package from the IMF, which has been delayed since November due to fiscal policy concerns.
‘Pakistan had not yet achieved the preset level.’
The IMF’s Managing Director, Kristalina Georgieva, had stated the day before that Pakistan had not yet reached the default level.
Georgieva stated during a news conference at the Fund’s Washington headquarters on the spring meeting of Breton Wood Institutions that the Fund was securing confirmation from international partners to cover Pakistan’s financing gap requirements.
In response to a query on Pakistan’s impending default danger, she stated, “Pakistan had not yet reached that level and would not, but the country required a sustainable policy framework to avert such risks.”
She stated that the lender has been working extremely hard with Pakistani authorities as part of the present program to ensure that the country has the policy framework in place to avoid reaching the point of unsustainable debt.
“My hope is that with everyone’s goodwill and the implementation of what the Pakistan authorities have already agreed to, we can successfully complete our current program,” Georgieva said.
