IMF board approves Pakistan's $7bn loan

WASHINGTON: The International Monetary Fund (IMF) Executive Board on Wednesday approved a $7 billion Extended Fund Facility (EFF) for Pakistan.

Prime Minister Shehbaz Sharif hopes that it will be the country's final IMF program.

The agreement for the 37-month loan was reached in July, following the confirmation of $12 billion in bilateral loans from Saudi Arabia, China, and the UAE.

According to insiders, Pakistan owes $5 billion to Saudi Arabia in cash deposits, while it also holds $4 billion in deposits from China and $3 billion from the UAE. Securing $2 billion in external financing from bilateral and commercial lenders was a key requirement for the IMF’s board approval.

Subsequently, the IMF identified an additional external financing gap of $2 to $2.5 billion.

This gap was filled through confirmations from Saudi Arabia, which included a Saudi oil facility, $400 million from the Islamic Trade Finance Corporation (ITFC), and the rest from Standard Chartered Bank and other Middle Eastern commercial banks.