The International Monetary Fund’s (IMF) Executive Board finally authorized Pakistan’s $7 billion Extended Fund Facility (EFF), which Prime Minister Shehbaz Sharif believes would be the country’s last.
Pakistan and the IMF agreed on a 37-month financing plan in July of this year.
The major development came about as a result of Saudi Arabia, China, and the United Arab Emirates confirming bilateral loans totaling $12 billion.
Insiders claim that Pakistan owes Saudi Arabia $5 billion in cash contributions. It should be mentioned that Pakistan also has $3 billion from the UAE and $4 billion in deposits from China.
Prior to the IMF board’s approval, Pakistan had to get $2 billion in external funding from bilateral and commercial lenders.
Following that, the international lender discovered a $2 to $2.5 billion external financing gap.
According to the reports, confirmation was obtained from the kingdom in the form of a Saudi oil facility and an ITFC facility worth $400 million from IsDB, with the remaining funds coming from Standard Chartered Bank and other commercial banks based in the Middle East.
For years, Islamabad has been mostly dependent on IMF programs.
At times, it has been on the verge of sovereign default and has had to rely on Saudi Arabia and the United Arab Emirates to give it the money it needs to satisfy the IMF’s requirements for external funding.
