Pakistan is nearing IMF tranche unlocking as the UAE confirms $1 billion in help.
According to the finance minister, Pakistan is currently working on the necessary paperwork to receive the deposit from UAE authorities.
ISLAMABAD: The United Arab Emirates (UAE) reaffirmed to the International Monetary Fund (IMF) its bilateral contribution of $1 billion to Pakistan on Friday, according to Finance Minister Ishaq Dar. This was the final requirement to conclude staff-level agreements with the IMF.
The finance minister said via his official Twitter account that the State Bank of Pakistan was currently “engaged for necessary documentation for taking the said deposit from UAE authorities.”
IMF gatherings
Pakistan strongly urged the IMF to be flexible and sign the staff-level agreement during a previous meeting, but it was unable to secure a date despite rising worries in Islamabad about the effects of a deepening economic crisis.
In a virtual meeting with Jihad Azour, the IMF’s director for the Middle East and Central Asia Department, Ishaq Dar, the finance minister, made the request. The IMF, however, continued to bring up the subject of gasoline subsidies and potential fiscal leakages as a result of the implementation of the subsidy plan, thus the minister was unable to achieve the intended outcome.
Both parties have discussed their various stances on the $6 billion in necessary foreign financing, which Pakistan needs from now until June to avoid.
The UAE had promised to fulfill its commitment to provide $1 billion, while Dar had notified the IMF that Saudi Arabia had confirmed its $2 billion loan to Pakistan.
According to a news release from the finance ministry, the two parties also addressed the progress made on the IMF programme, in particular the discussions had with the IMF team during its visit to Pakistan, and the execution of earlier steps.
The current account deficit for the first eight months of this fiscal year remained at $3.9 billion. Dar reassured the IMF that Pakistan would secure the $2 billion additional loan from the World Bank, the Asian Infrastructure Investment Bank, and the commercial banks in the event that the Fund approved the staff-level agreement.
