Karachi: Pakistan's Finance Minister Ishaq Dar said that the country has received financial support of $1.3 billion from the UAE and China. This will help the struggling government a chance to meet the conditions set by the IMF for a bailout.
Pakistan signed a $6.5 billion bailout package with the IMF in 2019 but has repeatedly reneged on conditions. So far, only $3 billion has been released. The IMF insists that Pakistan must boost its low tax base, end tax exemptions for the export sector, and raise artificially low petrol/electricity/gas prices meant for low-income families.
China on Friday released $300 million to Pakistan which is the last tranche of a $1.3 billion rollover loan. Dar said that the UAE had promised a billion dollars to prop up Pakistan's reserves. The forex reserves are currently at $4.04 billion.
Dar tweeted, "UAE authorities have confirmed to the IMF their bilateral support of US$ one billion to Pakistan."
Pakistan's central bank is now preparing the documentation to receive the deposit. Faisal Shaji, chief strategy officer at Standard Capital Securities, said the latest funding will put Pakistan back on the IMF-laid track.
Pakistan is facing an economic crisis and has a national debt of $274 billion.