In a recent statement, Pakistan's Prime Minister, Shehbaz Sharif, expressed confidence in obtaining a $3 billion bailout from the International Monetary Fund (IMF). He conveyed these sentiments as he anticipated the approval of the fund's board during a meeting on Wednesday.
Last month, Pakistan and the IMF came to a preliminary agreement, effectively guaranteeing critical financial support for the economically distressed nation. Prior to the release of the $1.1 billion immediate disbursement and the subsequent phased payments, this agreement must be ratified by the board.
Sharif communicated his optimism about the board's approval during a function in Islamabad. He was hopeful that the approval would contribute significantly to the stabilization of Pakistan's economic condition.
The precarious state of Pakistan's economy, which teetered on the brink of insolvency, was granted a nine-month reprieve. This brief respite was achieved after eight months of challenging negotiations centered on fiscal responsibility.
Plagued by an overwhelming balance of payments crisis, Pakistan's $350 billion economy faced severe impediments. The reserves of the country's central bank were scarcely sufficient to maintain a month's worth of regulated imports.
Upon the IMF board's endorsement, Pakistan would be able to access additional bilateral and multilateral external financing sources.
Ishaq Dar, Pakistan's Finance Minister, declared on Wednesday that the United Arab Emirates had deposited $1 billion into Pakistan's central bank. This was aimed at fortifying the nation's foreign exchange reserves.
In the past quarter, Beijing has renewed $5 billion of Pakistan's loan, an action Sharif deemed instrumental in evading a potential debt default.
Saudi Arabia, demonstrating its support, deposited $2 billion with the central bank on Tuesday. Dar confirmed that the capital infusions from both the UAE and Saudi Arabia would be factored into the nation's reserve data scheduled for release on Thursday.
In a boost to investor sentiment, Fitch, the credit rating agency, upgraded Pakistan's sovereign rating from CCC- to CCC on Monday. This action, coupled with the anticipated bailout, has provided a much-needed respite to stakeholders in Pakistan's stocks and bonds.
