ISLAMABAD: Pakistan has signed a Staff Level Agreement (SLA) with the International Monetary Fund for additional deposits of $2 billion from the World Bank and the Asian Infrastructure Investment Bank (AIIB) and a loan of $950 million from Saudi Arabia. Asking for confirmation. (IMF) within the coming week, JEE News reported.
“We are optimistic,” a government official working with the IMF responded when asked about the development.
The World Bank’s Resilient Institute for Sustainable Economies (RISE-II) has offered AIIB a loan of only $950 million if Pakistan receives a bailout from the IMF.
Another official assured that Pakistan expects to strike an SLA with the IMF in the next few days, however, the fund was reluctant to give a timeframe for finalizing the agreement.
China has already refinanced two commercial loans worth $1.2 billion in two tranches, $700 million and $500 million. Now two more tranches of $500 million and $300 million will be refinanced by Chinese commercial banks in the coming days.
Due to the growing rivalry between China and the US, Pakistan is facing difficulties in negotiating with the IMF as it has to maintain the SLA in a delicate balancing act of managing the economy and diplomacy in a way that Islam Be in line with the larger interest of the population.
China has come to Pakistan’s rescue at a critical time as Beijing refinanced its trade debts before signing a deal with the lender.
“This is a big help from the Chinese friends and Islamabad expects them to return the deposits in the coming weeks,” official sources said.
Pakistan had implemented all prior steps to secure the resumption of the IMF program to meet the pending ninth review and under the Extended Fund Facility (EFF) signed by the Imran Khan government in 2019. A major tranche of billion dollars can be released.
Under the IMF’s prescription, the government had taken several steps, including raising the GST rate from 17 percent to 18 percent, unveiling a mini-budget to generate additional tax revenue of Rs 170 billion, reducing electricity rates. I included an increase of over Rs.7. unit, another imposition of power surcharge of Rs 3.82 per unit, increase in gas tariff, allowing large-scale adjustment in exchange rate, increase in petroleum development levy and increase in policy rate by 300 basis points, from 17 percent to 20 percent. done
Pakistan is aiming to take its foreign exchange reserves to $10 billion by the end of June 2023, which has now reached about $4 billion after receiving two tranches of commercial loans from Chinese banks.
