Pakistan needs confirmation from Saudi Arabia that it has secured further deposits of $2 billion and loans of $950 million from the World Bank and Asian Infrastructure Investment Bank to sign a Staff-Level Agreement (SLA) with the International Monetary Fund (IMF) within the next week (AIIB).
When queried about the development, a government official dealing with the IMF responded, “We are optimistic.”
If Pakistan is awarded the IMF bailout, the Resilient Institute for Sustainable Economy (RISE-II) of the World Bank proposed $950 million in AIIB loans.
A further official added that Pakistan expected to achieve an SLA with the IMF in the coming days, but the Fund was reticent to set a date for the agreement’s conclusion.
China has previously refinanced two commercial loans for $1.22 billion in two installments totaling $700 million and $500 million. In the next few days, two additional payments totaling $500 million and $300 million will be refinanced by Chinese commercial banks.
Because of the escalating hostility between China and the United States, Pakistan is having difficulty negotiating with the IMF. Therefore, it must secure the SLA while managing the economy and diplomacy to promote Islamabad’s bigger objectives.
Beijing refinanced Pakistan’s commercial loans before the lender’s agreement was inked, assisting Pakistan during this exceptionally difficult period.
According to official sources, Islamabad hopes that our Chinese allies will also roll over the deposits in the next weeks, which is tremendous assistance.
To complete the next ninth review and release the important $1 billion tranche under the Extended Fund Facility (EFF) inked by the Imran Khan administration in 2019, Pakistan has taken all necessary steps to revive the IMF program.
Following IMF recommendations, the government released a mini-budget for generating additional tax revenues of Rs170 billion by increasing the GST rate from 17 percent to 18 percent, increasing power tariff by more than Rs7 per unit, imposing a second power surcharge of Rs3.82 per unit, increasing gas tariff, allowing significant exchange rate fluctuations, raising petroleum development levy, and raising policy rates.
After obtaining two installments of commercial loans from Chinese banks, Pakistan aims to enhance its foreign exchange reserves of approximately $4 billion to $10 billion by June 30, 2023.
 with the International Monetary Fund (IMF) within the next week (AIIB).){kind=link}