The International Monetary Fund’s (IMF) Executive Board on Wednesday approved a $7 billion Extended Fund Facility (EFF) for Pakistan, which Prime Minister Shehbaz Sharif hopes would be the country’s last.
Pakistan and the IMF reached an agreement on the 37-month loan programme in July this year.
The breakthrough was achieved in the aftermath of getting confirmation of $12 billion bilateral loans from Saudi Arabia, China and the UAE.
According to insiders, Pakistan owes $5 billion to Saudi Arabia in the form of cash deposits. It must be noted that Pakistan also holds $4 billion in deposits from China and $3 billion from the UAE.
Pakistan was required to secure external financing of $2 billion from bilateral and commercial lenders as a pre-requisite for the IMF board’s approval.
Later, the global lender identified external financing gap of $2 to $2.5 billion and confirmation was secured from the kingdom in the shape of Saudi oil facility as well as ITFC facility of $400 million from IsDB and remaining from Standard Chartered Bank and other Middle East-based commercial banks, as per The News report.
Islamabad has relied heavily on IMF programmes for years, at times nearing the brink of sovereign default and having to turn to countries such as the United Arab Emirates and Saudi Arabia to provide it with financing to meet external financing targets set by the IMF.