Pakistan gets Saudi Arabia’s green signal for $2b funding

Islamabad: Pakistan has received the nod for funding to the tune of $2 billion from Saudi Arabia, according to informed sources.

The development is a significant step towards reaching a staff-level agreement with the International Monetary Fund (IMF), which has imposed the condition of Pakistan securing $3 billion from other countries for the revival of its $6.5 billion bailout package, The Express Tribune reported.

Apart from Saudi Arabia giving the green signal for the provision of $2 billion to Pakistan, the sources said Finance Minister Ishaq Dar would meet the leadership of the UAE before leaving for the US on April 10.

The sources further said the IMF was still insisting on its demand for a further increase in the interest rate according to inflation and opposing the annual subsidy of Rs900 billion.

They added that the global lender was unwilling to budge from its demand for Pakistan to collect 850 billion PKR in terms of the petroleum development levy (PDL).

The sources said the IMF was demanding from Pakistan to reduce its import of petrol and diesel.

They added that the global lender had also demanded to meet the shortfall of the PDL and taxes, The Express Tribune reported.

Last month, the IMF said Pakistan had made “substantial progress” toward meeting policy commitments needed to unlock loans the country needs to avoid default.

The international lender said Pakistan had a few more tasks before it could unlock a $6.5 billion loan to avoid a default, putting pressure on the government to secure assurances from countries that have promised financing support, The Express Tribune reported.

Esther Perez Ruiz, the IMF’s resident representative for Pakistan, said a staff-level agreement would follow once the few remaining points were closed.