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Saudi commits to IMF on financial support to Pakistan

Logo, Person, Man Reuters/Johannes Christo
Egypt vowed to adopt a flexible exchange rate when it reached the loan agreement with the IMF late last year

Saudi Arabia has conveyed its commitment to the International Monetary Fund regarding its financial support to Pakistan, according to a local media report.

Riyadh’s $2 billion commitment in financing support to Pakistan is one of the final conditions for an IMF deal Islamabad needs to prevent a default.

The staff-level agreement has been delayed, holding back the $7 billion extended fund facility since October 2022.

No other option except the IMF programme was currently under consideration by the government, Pakistan’s junior finance minister Aisha Ghaus Pasha said, adding the IMF’s requirements and reforms were in the interest of the country in addressing domestic and external deficits.

She said a Pakistani delegation will be participating in spring World Bank and IMF meetings in Washington starting early next week led by finance minister Ishaq Dar. 

In January, Saudi Arabia said it might increase its investments in the cash-strapped Pakistan economy to $10 billion, as well as raise the ceiling on deposits into the Pakistan central bank to $5 billion.

In December 2022 Riyadh extended the terms of an existing $3 billion deposit in the central bank it made in 2021.

The UAE agreed to loan $1 billion to Pakistan and roll over an existing $2 billion loan in January. Qatar’s sovereign Qatar Investment Authority has also announced plans to invest $3 billion in Pakistan.