The International Monetary Fund (IMF) has officially included Pakistan’s agenda for a $7 billion loan approval in its Executive Board meeting scheduled for September 25.
The calendar for the IMF Executive Board meeting has been released, confirming that the South Asian country’s agenda would be discussed. The loan request falls under Pakistan’s Extended Fund Facility, and the board would consider the approval of the loan during the meeting.
Pakistan and the IMF reached an agreement on the 37-month loan programme in July. The IMF said the programme is subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.
The South Asian country has also taken loans from commercial banks, foreign lenders, and friendly countries to improve the economy.
Prime Minister Shehbaz Sharif said last week that “friendly” countries have helped Pakistan meet the requirements necessary to secure an IMF bailout.
He said he would not provide further details on the assistance at this moment. Pakistani officials had said they were trying to arrange up to $2 billion to meet a financing gap and were in discussions with commercial banks for this.
If the Executive Board is satisfied, Pakistan will begin receiving disbursements, with the first tranche being released upon loan approval.
Sources added that Pakistan “is optimistic about securing the loan approval” from the board.
Islamabad has for years relied on China, Saudi Arabia and the United Arab Emirates for financial assistance to meet external financing requirements and avoid sovereign default, which it came close to last summer.
According to the finance ministry, the country secured $57.27 billion in external loans, which are separate from the IMF programme, over the last five years.
Of this amount, $9.81 billion was obtained for “various projects.” Moreover, $3.9 billion has been repaid in interest or markup on these external loans.
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Finance Minister Muhammad Aurangzeb said on Saturday that his five predecessors had not been able to negotiate such favourable terms with the global lender.
“I urge everyone to read this IMF agreement, which will be made public on September 25,” he said while addressing the 21st Annual Excellence Awards organized by CFA Society Pakistan in Karachi on Saturday.
