Pakistan to borrow $2.8 bn from IMF under Saudi’s SDR quota

• Roshan Amiri
• . August 16, 2022
• . Update: August 18, 2022 8:00 pm
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Saudi arabia–Following news that Saudi Arabia planned to renew a USD 3 billion deposit at the State Bank of Pakistan, Pakistan claimed that Islamabad had been able to borrow up to USD 2.8 billion against Riyadh’s quota of SDRs.

The International Monetary Fund (IMF) and Saudi Arabia have also discussed the idea of Pakistan being able to borrow up to USD 2.8 billion from the Fund, according to a report in the nation’s publication The News International.

When everything is said and done, Pakistan’s IMF borrowing will rise by USD 2.8 billion for the current fiscal year (July to June). According to a top Pakistani official quoted by The News International, this will be a highly significant gesture.

The support would enable Pakistan to receive the USD 1.2 billion payment from the IMF, whose board is expected to approve the payment at its meeting this month.

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The IMF agreed to increase the loan package by USD 1 billion, bringing the total to USD 7 billion, but only after receiving guarantees that Pakistan will receive extra funding from other sources.

Miftah Ismail, the finance minister of Pakistan, had issued a warning that economic problems will last till September. Inflation is on the rise, energy costs are high, and the value of the Pakistani rupee is falling.

“Difficulties will persist until September. No matter what, you will pay your fair amount of taxes, and I apologise for the hardships everyone is experiencing, but my goal is to prevent the country from going into default,” Miftah stated.

After meeting with the Karachi Chamber of Commerce and Industry (KCCI), the finance minister told a press conference that the coalition government had made difficult decisions after taking office, including cutting subsidies and expanding the tax base, and that it was sorry to the business community for doing so.

The finance minister added that the government had to make difficult choices including eliminating subsidies for power and fuel products.