Pakistan is reportedly close to securing a loan from the International Monetary Fund (IMF) after Saudi Arabia pledged $2 billion and the United Arab Emirates (UAE) is expected to provide a written guarantee for $1 billion financing to help the country avoid default.
The IMF has asked Pakistan to secure external financing from friendly countries and multilateral partners to fund its balance of payment gap for this fiscal year.
The country is facing one of its biggest economic crises in history, with high interest rates, record consumer prices, a dollar shortage, and supply chain disruptions leading to companies stopping production.
The IMF has cut its growth forecast for the country to 0.5% from the earlier estimate of 2%. The deal with the IMF will also unlock other financing avenues to help Pakistan shore up its foreign exchange reserves and steer out of a balance of payment crisis.