Ishaq Dar says UAE confirms $1bn support to unlock IMF bailout

ISLAMABAD: Finance Minister Ishaq Dar said on Friday that the United Arab Emirates (UAE) has confirmed to the International Monetary Fund (IMF) that it will provide support of $1 billion to Pakistan.

“UAE authorities have confirmed to IMF for their bilateral support of US $1 billion to Pakistan,” Dar said in a tweet today.

Ishaq Dar added that the State Bank of Pakistan (SBP) was now “engaged for needful documentation for taking the said deposit from UAE authorities”.

IMF program — 9th Review Update:

UAE authorities have confirmed to IMF for their bilateral support of US $ One billion to Pakistan.

State Bank of Pakistan is now engaged for needful documentation for taking the said deposit from UAE authorities.

AlhamdoLilah!

— Ishaq Dar (@MIshaqDar50) April 14, 2023

The move will pave way for Pakistan to unlock the months-long delayed $1.1 billion IMF loan tranche to shore up the country’s struggling economy.

Separately, Dar announced that the SBP would also receive today the third and last disbursement from the Industrial and Commercial Bank of China (ICBC) worth $300 million.

Out of Chinese Bank’s #ICBC approved facility of $1.3 billion (which was earlier repaid by Pakistan), State Bank of Pakistan would receive back third and last disbursement today in its account amounting to $ 300 million.
It will shore up forex reserves of Pakistan.
AlhamdoLilah!

— Ishaq Dar (@MIshaqDar50) April 14, 2023

Saudi Arabia last week had also told the IMF it will provide $2 billion in financing to Pakistan.

Pakistan has less than a month’s worth of foreign exchange reserves and is awaiting a bailout package of $1.1 billion from the IMF that has been delayed since November over issues related to fiscal policy adjustments.

To unlock the funding, the government has cut back on subsidies, removed an artificial cap on the exchange rate, added taxes and raised fuel prices.

The IMF’s managing director Kristalina Georgieva said the previous day the fund was also in talks with friendly countries of Pakistan to provide financial assurances so it can complete the programme.

IMF chief Kristalina Georgieva has hoped that Pakistan won’t face Sri Lanka and Ghana-like situations. “Pakistan won’t default. “It is best not to get there, and currently, we are not there yet,” IMF Managing Director Kristalina Georgieva said at a news briefing in Washington.

The IMF and Pakistani officials, she said, were also discussing how to support Pakistan “in terms of providing financial assurances so we can complete the programme”.