Business

Pakistan inches closer to IMF deal as UAE ‘confirms’ $1bn support

Published

2 years ago

Farwa

SBP is now engaged in needful documentation, Dar says.
Last week, IMF indicated it has received assurance from Riyadh.
IMF is securing confirmation from international partners.

Finance Minister Ishaq Dar on Friday announced that the United Arab Emirates (UAE) authorities have informed the International Monetary Fund (IMF) about their plans of providing $1bn support to Pakistan.

The move will pave way for Pakistan to unlock the critical $1.1 billion loan tranche from the IMF as the Fund was securing confirmation from international partners to meet the financing gap requirements of Pakistan.

“UAE authorities have confirmed to IMF for their bilateral support of [$1] billion to Pakistan,” Dar announced on Twitter.

IMF program — 9th Review Update:

UAE authorities have confirmed to IMF for their bilateral support of US $ One billion to Pakistan.

State Bank of Pakistan is now engaged for needful documentation for taking the said deposit from UAE authorities.

AlhamdoLilah!
— Ishaq Dar (@MIshaqDar50) April 14, 2023

The finance minister added that the State Bank of Pakistan (SBP) is now engaged in needful documentation for taking the said deposit from the UAE authorities.

Last week, the Washington-based Fund conveyed to Pakistan that it had received confirmation from Saudi Arabia on $2 billion in additional deposits.

“The IMF has indicated it has received the assurance from Riyadh”, State Minister for Finance Aisha Ghaus Pasha told reporters in Islamabad last week.

Saudi Arabia’s $2 billion and UAE’s $1 billion pledged in external financing support to Pakistan is one of the final conditions for an IMF deal that Islamabad needs to avert a default.

Pakistan has less than a month’s worth of foreign exchange reserves and is awaiting a bailout package of $1.1 billion from the IMF that has been delayed since November over issues related to fiscal policy adjustments.

‘Pakistan had not reached default level yet’

A day earlier, IMF Managing Director Kristalina Georgieva said that Pakistan had not reached the default level yet.

Georgieva, while addressing a news conference on the spring meeting of Breton Wood Institutions at the Washington-based Fund headquarters, said the Fund was securing confirmation from international partners to meet the financing gap requirements of Pakistan.

In response to a question regarding the looming default risk facing Pakistan, she said: “Pakistan had not yet reached that level and it would not but the country required a sustainable policy framework to avert such risks”.

She said the lender has been working very hard with the authorities in Pakistan within the context of the current programme to make sure the country has the policy framework in place to prevent reaching the point of unsustainable debt.

“My hope is that with the goodwill of everyone, and the implementation of what has been already agreed by the Pakistan authorities, we can complete our current programme successfully,” Georgieva maintained.

Business

E&P Companies Will Invest $5 Billion in Pakistan’s Petroleum Industry

Published

1 day ago

Farwa

Over the next three years, local and foreign companies involved in Pakistan’s oil and gas exploration and production sector have shown a strong desire to invest more than $5 billion in the nation’s energy sector.

Recent changes to the Petroleum Policy and the implementation of an exclusive tight gas policy, which provide better incentives and a more investor-friendly regulatory framework, are credited with the increase in investor confidence.

These strategic changes are expected to boost domestic energy production, open up new avenues for growth, and draw large amounts of both domestic and foreign investment.

Business

With inflation slowing, the SBP is anticipated to lower the policy rate for the eighth time in a row.

Published

1 day ago

Farwa

Businesspeople anticipate another reduction in the policy rate when the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) releases the updated rate.

The interest rate for the upcoming two months will be announced by the central bank. It is still unclear if the rate will stay the same or be lowered to reflect stakeholder expectations.

According to experts, the policy rate will be lowered in order to further boost the nation’s economic sector.

Interest rates may be lowered for the seventh time in a row if the inflation rate declines significantly more than anticipated.

In its last six sessions, the MPC had cut the policy rate by 10 percent. In January 2025, it decreased the rate by one percent to 12pc.

12PC POLICY RATE

In January, the State Bank of Pakistan (SBP) announced cut in key policy rate by 100 basis points (bps) to 12 percent from 13pc in line with expectations of the business community.

The policy rate, which had been at 22 percent since June 2024, was slashed by 1,000 basis points to 12 percent.

The SBP governor said the decision was taken with careful consideration. “Although inflation is expected to decline next month (February), core inflation remains a pressing concern,” he stated.

Ahmed highlighted strong remittance inflows and robust export growth as key factors supporting the current account.