Pakistan: Efforts on to obtain USD 3-4 bn from friendly countries in case IMF deal doesn't get through

Islamabad [Pakistan] June 18 : Pakistan is trying to obtain USD 3-4 billion from friendly countries in case its deal with the International Monetary Fund does not get through, The News International reported.

The IMF programme is scheduled to expire on June 30, 2023. Both sides, the IMF and Pakistan, had gone public despite showing their commitment to remain engaged for the completion of the 9th Review under the $6.5 billion Extended Fund Facility (EFF) programme, The News International said.

In case the ninth review does not happen, the Q block (Ministry of Finance) is considering all available options to secure bridge financing from bilateral friends to prevent the emerging crisis on its external accounts, as per The News International.

The top official sources told the reporters of The News International, "With the provision of bridge financing of $3-$4 billion from bilateral friends, Pakistan can manage its financing needs. This arrangement is under active consideration and will be implemented in order to avoid the danger of default in the next few months till the end of October or November 2023."

It might only be our delusion as friendly countries like Saudi Arabia and the United Arab Emirates (UAE) have linked their additional deposits of USD 2 billion and USD 1 billion respectively with the signing of the Staff Level Agreement (SLA) and revival of the IMF programme, as per The News International.

"This arrangement is in our minds and we will request additional deposits of $3 billion from our bilateral friends and hope it will be done. If it is materialised, then it will help Islamabad pass the next few months without fear of default," said a top official.

Whereas, Ishaq Dar, the Minister for Finance said that China would grant a rollover of USD 1 billion and USD 300 million commercial loan re-financing within the ongoing month. So, USD 2.3 billion would not deplete from the foreign exchange reserves by the June end of this year.

During this televised speech on Saturday, the Finance Minister said that Pakistan had paid back USD 1 billion dollars to China Development Bank under its devised strategy and another USD 300 million to the Bank of China even before their due date, thinking that it would be re-financed as soon as possible, according to The News International.

He further said that these banks agreed not to charge anything as a penalty. China had re-financed USD 1 billion by the China Development Bank and it was the fastest execution. Pakistan has also paid off USD 300 million in commercial loans now. It was also wished to be re-financed within the next four to five days. All procedures have been completed, he added.

Dar said, on the safe deposits of USD 1 billion, Pakistan needed rollover of two deposits of USD 500 million each and renewal was in the order within the ongoing month. As predicted by an international rating agency, he said Pakistan had to repay USD 3.7 billion and all repayments would be done on time. There would be no major reduction in the foreign exchange reserves held by the State Bank of Pakistan (SBP) till June 30, 2023.

On Shell Pakistan, the Finance Minister said that the company was going to sell its share to an international investor, so their business activities would not close down in the country.

All employees would remain intact and no money would be remitted from the country. The Shell was making plans for separation from energy, so it was their internal decision, he said. There is nothing to worry about. He added that this news is not new for the government, according to The News International.

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