ISLAMABAD: The coalition government of Pakistan has shared its plan with the International Monetary Fund (IMF) to secure an additional $3 billion loan to bridge the financing gap as the country expedites efforts to persuade the lender to release the next loan tranche.
The IMF had asked Pakistan to ensure the arrangement of $6 billion in external financing, a sum that Pakistan’s struggling $350 billion economy needs from now until June to avoid default.
Pakistan has shared a plan with the International Monetary Fund (IMF) to secure an additional $3 billion in financing to bridge the country’s financial gap. The IMF has requested necessary financing assurances as soon as possible to conclude talks with Pakistan on its bailout.
To avoid default, Pakistan needs $6 billion in external financing until June. The country has informed the IMF regarding its plan to secure a $450 million worth second Resilient Institutions for Sustainable Economy budget support loan.
IMF programme to disburse $1 billion to Pakistan before June
It plans to get $1 billion from Asian Infrastructure Investment Bank (AIIB) and some other commercial banks. The IMF loan programme will disburse another tranche of more than $1 billion to Pakistan before it concludes in June, unlocking other bilateral and multilateral financings for the country.
Once the staff-level deal is signed with the IMF, it will become easier for Pakistan to secure financing. However, Pakistan’s foreign exchange reserves have fallen to barely cover a month of imports after IMF funding stalled in November.
The country risks defaulting on external payment obligations without completing the ninth review exercise on a bailout package agreed upon in 2019.
