Rekindling expectations for an early signing of the agreement, the International Monetary Fund (IMF) has informed Pakistan that it has confirmation from Saudi Arabia of $2 billion in additional deposits.
Since the end of January, Islamabad and the IMF have been negotiating the release of $1.1 billion from a $6.5 billion bailout plan agreed upon in 2019. The government has reduced subsidies, removed a fictitious exchange rate ceiling, increased taxes, and raised fuel costs to release the money.
However, the agreement has been postponed due to promises of extra funding from friendly countries.
The lender informed the Pakistani authorities about the development; sources told The News on Wednesday. The Fund employees appeared to be generally pleased with the most recent confirmation.
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According to the report, the Saudi government is now prepared to make a public statement, possibly during Prime Minister Shehbaz Sharif’s impending visit to the country.
In an interview, the Saudi ambassador to Pakistan recently hinted that his nation had always stood by Pakistan in difficult circumstances and that happy news would be announced shortly.
According to the sources, all eyes are now on the UAE to confirm a further $1 billion deposit from them, which could open the door to negotiating an SLA with the IMF.
On his way to the US, where he is scheduled to discuss the release of funds, Finance Minister Ishaq Dar is likely to stop in the UAE.
In consultation with the PM Office, the Ministry of Petroleum revealed an unforeseen cross-fuel subsidy for owners of motorcycles and cars up to 800cc, which needed to be scrapped at this point. This unexpected cross-fuel subsidy was another roadblock to signing the SLA with the IMF.
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According to the sources, the government has not yet withdrawn the proposed cross-fuel subsidy, which cannot be put into place hastily.
Such plans were considered during the administration of previous finance minister Shaukat Tarin and even when Miftah Ismail oversaw the Ministry of Finance during the PDM-led administration.
Former Finance Minister Miftah Ismail had also allocated Rs 48 billion for Sasta Petrol on the eve of the previous budget. Still, it could not be carried out because such plans could not be adequately developed.
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The IMF used the announcement of a half-baked cross-fuel subsidy as a justification for delaying the signing of the SLA because they were still seeking clarification on how the program would be implemented transparently.
 has informed Pakistan of Saudi Arabia's confirmation of a $2 billion deposit, increasing the likelihood of signing an agreement on the bailout plan. This development could lead to further financial support from friendly countries.){kind=link}