Finance

Saudi and UAE commit to debt rollover for Pakistan

By Pramod Kumar

August 7, 2024, 6:02 AM

Pakistan finance minister Muhammad Aurangzeb. The IMF's $7bn extended fund facility may be approved next month

Saudi Arabia, the UAE and China have confirmed their debt rollover for one year to support Pakistan’s $7 billion bailout package with the International Monetary Fund (IMF), a media report said.

The rollover amount will be the same as last year, Bloomberg reported, quoting Pakistan’s finance minister Muhammad Aurangzeb.

Islamabad has $12 billion in bilateral loans, which have been extended for the past few years.

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The IMF has assessed an external financing gap of $3-5 billion, The News International, a Karachi-based English publication, reported, citing Aurangzeb.

Pakistan will have to fill this gap over 37 months to secure the IMF’s $7 billion extended fund facility (EFF), the minister said, adding that the government is working towards getting assurances for the additional amount.

The IMF may consider approving the EFF package by the end of August or early September.

In November 2023, the Saudi Fund for Development extended the period for its deposit of $3 billion to Pakistan for another year.

The UAE deposited $1 billion in Pakistan’s central bank, finance minister Ishaq Dar said in July 2023.

Aurangzeb said the government has appointed a consultant to launch the Panda bond, which is expected this year.

Panda bonds are securities denominated in yuan but issued by non-Chinese borrowers.

Last week, Fitch Ratings upgraded Pakistan’s credit rating to CCC+, following greater certainty regarding the continued availability of external funding.