Finance Minister Ishaq Dar announced on Friday that the United Arab Emirates (UAE) has confirmed its bilateral support of $1 billion to Pakistan, the last requirement to complete staff-level agreements with the International Monetary Fund (IMF).
This was announced by the finance minister via his official Twitter handle, where he further stated that the State Bank of Pakistan is now “engaged for needful documentation for taking the said deposit from UAE authorities”.
IMF Meetings :
In an earlier meeting, Finance Minister Ishaq Dar requested the IMF to show flexibility and sign the staff-level agreement, but was unable to secure a date despite Islamabad’s growing concerns about the economic crisis. The request was made in a virtual meeting with Jihad Azour, the IMF’s director for the Middle East and Central Asia Department. The IMF raised the issue of petrol subsidy and potential fiscal leakages as a result of the implementation of the subsidy plan, despite Pakistan sharing its position on the $6 billion external financing requirements to avoid default.
Confirmation from Saudi Arabia and the UAE:
The IMF was informed that Saudi Arabia had confirmed the $2 billion lending to Pakistan, and Dar had assured that the UAE would confirm its commitment to give $1 billion. The two sides also discussed the progress made on the IMF programme and the implementation of prior actions during its visit to Pakistan.
Future Financing Arrangements :
During the first eight months of this fiscal year, the current account deficit remained at $3.9 billion. Dar assured the IMF that if the Fund signed the staff-level agreement, Pakistan would arrange the $2 billion additional loan from the World Bank, the Asian Infrastructure Investment Bank, and commercial banks. However, the IMF was asking for arranging commercial loans before the staff-level agreement, a demand that Pakistan is currently unable to meet in absence of the IMF umbrella.