Pakistan is likely to get $4 billion from friendly countries this month to plug a foreign exchange reserve gap flagged by the International Monetary Fund, Finance Minister Miftah Ismail said, two days after the cash-strapped country reached an agreement with the IMF lender to revive the $6 billion credit facility.Ismail on Saturday referred to the lack of foreign exchange reserves which had been highlighted by the International Monetary Fund (IMF), Dawn newspaper reported.
According to the IMF, the gap is USD 4 billion, the minister said.God willing, we will fill this gap in the month of July, he said.We think we will get $1.2 billion in deferred oil payment from a friendly country. We think a foreign country will invest between $1.5 billion to $2 billion in equity on a G2G (government-to-government) basis, and another friendly country may give us gas with a deferred payment, and another friendly country will make some deposits. ” he said without naming the friendly nations.
Pakistan on Thursday reached a tentative staff-level agreement with the IMF to revive a $6 billion credit facility. The deal paves the way for the release of a much-anticipated $1.18 billion loan tranche that has been on hold since earlier this year. The board is also considering adding $1 billion to the $6 billion program agreed in 2019, the Dawn newspaper reported. Depleting reserves, a widening current account deficit and a depreciation of the rupee against the dollar have left the nation facing a balance of payments crisis.Without an agreement with the IMF to open more avenues for external financing, Ismail said the country could have been headed for bankruptcy.
He said the country will also get about US$6 billion from multilateral lenders this fiscal year, including US$3.5 billion from the Asian Development Bank and US$2.5 billion from the World Bank.He said US$400 million to US$500 million is also expected from the Asian Infrastructure Investment Bank, while the Islamic Development Bank is also likely to increase funding.He hoped the rupee would strengthen against the dollar soon after the IMF deal is finalized, which is expected this month.In addition, he said the government intends to cut power imports to $2.7 billion this month from $3.7 billion last month, which was also expected to ease some pressure on the local currency, according to a Dawn report.
