ISLAMABAD: Pakistan has obtained assurances from China, Saudi Arabia, and the United Arab Emirates to roll over their debt for another year, providing a significant boost as it awaits final approval for a new $7 billion loan program with the International Monetary Fund (IMF), Bloomberg reported.
Finance Minister Muhammad Aurangzeb confirmed after a parliamentary committee meeting that the rollover amounts will match those of the previous year. Pakistan currently has $12 billion in bilateral loans that have been extended over recent years.
These assurances are crucial as Pakistan transitions between IMF loan programs to stay on top of its debt obligations. Additionally, the country has sought debt relief from China for power projects under the Belt and Road Initiative.
The government anticipates receiving final approval from the IMF by the end of this month for its new loan program. Prime Minister Shehbaz Sharif’s administration aims to address a financing gap of up to $5 billion during the IMF’s three-year program, according to Aurangzeb.
The finance minister highlighted positive developments, including a stable currency, as indicators of progress. Last week, Fitch Ratings upgraded Pakistan’s credit rating by one notch to CCC+ following the initial approval from the IMF. Aurangzeb aims to improve the rating to B- in the near future.
