Pakistan is seeking to secure additional deposits of $2 billion from Saudi Arabia and a loan of $950 million from the World Bank and the Asian Infrastructure Investment Bank to sign a Staff-Level Agreement (SLA) with the International Monetary Fund (IMF) within the next week, as reported by The News.
The World Bank’s Resilient Institution for Sustainable Economy (RISE-II) and the AIIB have linked the $950 million loan, which can only be approved if Pakistan secures the IMF bailout. The IMF has been reluctant to give any timeframe for finalizing the agreement.
Pakistan’s talks with the IMF have become more challenging due to increased hostility between China and the United States, making it a delicate balancing act for Islamabad to steer the economy and diplomacy in a way that serves its larger interest. However, China has come forward to refinance Pakistan’s commercial loans before the agreement with the lender, re-financing two commercial loans of $1.2 billion in two installments, $700 million and $500 million, and agreeing to re-finance two more installments of $500 million and $300 million in the coming days.
Pakistan has implemented all prior actions to secure the revival of the IMF program, including taking various measures prescribed by the IMF, such as raising taxes, increasing tariffs, and adjusting exchange rates, to fetch additional tax revenues and increase its foreign exchange reserves up to $10 billion by June 2023.
