Finance Minister Ishaq Dar announced on Friday that the UAE has confirmed its commitment to the International Monetary Fund (IMF) for $1 billion in bilateral financial assistance to Pakistan.
“UAE authorities have confirmed to IMF for their bilateral support of US $1 billion to Pakistan,” Dar said today in a tweet.
He went on to say that the State Bank of Pakistan (SBP) was now working on the necessary paperwork to accept the deposit from UAE officials.
Today’s penetration would result in the long-awaited staff-level agreement (SLA) with the Fund and the release of multilateral payments. The UAE’s assurance was vital for Pakistan, whose reserves had fallen by $170 million to barely remain at $4 billion.
Pakistan has been negotiating with the IMF to restart the $7 billion bailout programme in order to secure a $1.1 billion tranche since early February.
The finance minister stated last month that financing guarantees from friendly countries were the final hurdle in securing the IMF deal. Following that, the state minister of finance stated that the Fund had secured a funding commitment from Saudi Arabia.
IMF chief ‘optimistic’ about Pakistan Deal
Meanwhile, the IMF stated a day earlier that it intended to effectively complete its current programme with Pakistan.
“My hope is that with everyone’s goodwill and the implementation of what the Pakistani authorities have already agreed to, we can successfully complete our current programme,” IMF Managing Director Kristalina Georgieva said at a news conference in Washington on Thursday.
In response to a question about IMF-Pakistan talks to revive the 2109 loan package, Ms. Georgieva stated, “Within the context of our current programme, we have been working very hard with the authorities in Pakistan to ensure that Pakistan has the policy framework that allows it to avoid what you are talking about.”
The reporter who posed the question implied that Pakistan’s growing debt might become unsustainable.
Ms. Georgieva, on the other hand, stated that the goal of the IMF-Pakistan talks was to avoid the country’s debt becoming unsustainable. “We aren’t there yet, and it’s better not to get there,” she explained.
She added that the IMF and Pakistani officials were also discussing how to help Pakistan “in terms of providing financial assurances so we can complete the programme.”
Observers noted that, while the IMF chief ‘hoped’ that the talks would result in the renewal of the IMF’s package to Pakistan, she sounded less enthused than Pakistani officials, who have repeatedly promised their country that they were close to an agreement.
