Jakarta –
The United Arab Emirates (UAE) is providing support to Pakistan worth US$ 1 billion or the equivalent of Rp. 14.66 trillion. These funds are to help fulfill a bailout from the International Monetary Fund (IMF).
The commitment is one of the final conditions that Pakistan must meet in order to secure a US$1.1 billion loan from the IMF, which is part of a US$6.5 billion aid package that the IMF agreed to in 2019.
“The State Bank of Pakistan is preparing the necessary documents to collect these deposits from the UAE authorities,” Pakistan’s Finance Minister Ishaq Dar was quoted as saying by Reuters, Friday (14/4/2023).
Last week Saudi Arabia also told the IMF it would provide financing of US$ 2 billion to Pakistan.
Previously in 2018, Pakistan requested financial assistance to the IMF to help maintain the country’s economic stability. Conditions require Pakistan to carry out economic reforms such as increasing taxes and reducing energy subsidies.
The IMF has asked Pakistan to provide guarantees that its balance of payments deficit must be fully financed for the fiscal year ending in June in order for further funding to be unlocked.
Pakistan’s current foreign exchange reserves are limited to cover nearly a month of imports after IMF funding ceased in November. Until loan officials visited Islamabad in February for talks.
The IMF bailout package is very important for Pakistan to prevent default on external payment obligations.
The deal is also expected to pave the way for Pakistan to secure other bilateral and multilateral financing to shore up foreign exchange reserves that have fallen over the last four weeks and help it emerge from the balance of payments crisis it is facing.
(aid/hns)
