Islamabad [Pakistan]March 17 (ANI): Pakistan is now turning to Gulf states that have pledged to finance the country’s fiscal deficit, as the International Monetary Fund (IMF) is reportedly demanding confirmation from the countries before lenders can approve its $6.5 billion bailout package geographic news.
According to a report published by The News quoted by Geo News, the condition that the IMF asked Pakistan to make up the $6 billion shortfall was simply to protect its reputation. If the plan does not materialize, Pakistan could be pushed into default.
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All eyes are now on the UAE, Qatar and the Kingdom of Saudi Arabia (KSA) to save Pakistan’s struggling economy.
An official, speaking on condition of anonymity, said Pakistan had no choice but to wait and pray for confirmation from its Gulf allies.
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Global banks were forced to make the request during negotiations, in part because executive committee members from those countries had pledged various forms of financial support to Islamabad ahead of its seventh and eighth reviews, Geo News reported. These include further investments and deposits.
Still, they haven’t delivered on their promises, despite the fact that the fiscal year is a bit behind us.
According to sources cited by The News, as mentioned by Geo News on Thursday, “In this case, the IMF has thrown the ball in Pakistan’s court to secure 100% commitment from bilateral partners before Advance the signing of the staff level agreement (service level agreement)”.
The IMF has warned Islamabad that failure to secure Pakistan’s commitments from its bilateral partners after the staff-level agreement is finalized could push the country into default and jeopardize its credibility.
The fund is trying to determine why Pakistan’s bilateral partners are reluctant to honor previous commitments, the report said. In this case, Islamabad can only benefit from the support of Saudi Arabia, the UAE and Qatar if it is to reach a staff-level agreement, the report quoted sources as saying.
Only China came forward to save Islamabad by keeping its promise to refinance commercial debt and roll over SAFE deposits.
Pakistan asked to carry over $2 billion in SAFE deposits due next week.
Finance Minister Ishaq Dar revealed on Thursday that all paperwork required by the Industrial and Commercial Bank of China (ICBC) to issue a $500 million business loan has been completed.
Ishaq Dar tweeted, “Out of the $1.3 billion rollover loan approved by Industrial and Commercial Bank of China (which Pakistan repaid earlier in recent months), the Ministry of Finance has completed the second disbursement of $500 million documents for the release of funds to the State Bank of Pakistan.”
Previously, US$700 million and US$500 million of commercial loans were refinanced by Chinese commercial banks such as China Development Bank (CDB) and Industrial and Commercial Bank of China. Now, another $500 million will be raised on Friday (today) or next week. It is about to receive a total of US$1.7 billion in refinancing commercial loans of US$500 million from ICBC.
A few months ago, Pakistan repaid a total of 2 billion US dollars of commercial loans, and China promised that Pakistani commercial banks would refinance them.
According to Geo News, the sources mentioned in the report said that the final payment of ICBC’s $300 million commercial loan is now expected to be refinanced in the next few weeks. (Arnie)
(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)