Pakistan is seeking assistance from Gulf states to bridge its financing gap, as the International Monetary Fund (IMF) awaits confirmation before approving the ninth review. The IMF’s condition of Pakistan fill the gap of $6 billion is to ensure its credibility, as non-materialization could lead to Pakistan defaulting.
Pakistan is looking towards the Kingdom of Saudi Arabia (KSA), the UAE, and Qatar to aid its struggling economy. However, an anonymous official stated that Pakistan must wait for confirmation from Gulf partners as they have no other option.
The IMF’s condition was brought forth because representatives of these countries on the Executive Board had made commitments before the approval of the seventh and eighth reviews, including additional deposits and investments, which they failed to materialize despite several months passing in the current fiscal year.
Sources confirmed that the IMF has placed the ball in Pakistan’s court to secure a 100% commitment from bilateral partners before signing the Staff Level Agreement (SLA). Failure to do so could result in Pakistan defaulting and endangering the Fund’s credibility.
Pakistan has requested the rollover of SAFE deposits of $2 billion that mature next week. The IMF seeks to find the reasons why Pakistan’s bilateral partners are not fulfilling their earlier commitments, and approval from Gulf states, such as Saudi Arabia, the UAE, and Qatar, can aid Pakistan in striking a staff-level agreement, said the sources. China is the only country that has come forward to fulfil its commitments on re-financing Islamabad’s commercial loans and rollover of its SAFE deposits.
