Pakistan Secures Debt Extension Assurances from China, UAE, and Saudi Arabia
Pakistan has received commitments from China, Saudi Arabia, and the United Arab Emirates to extend debt repayment for a year, providing a much-needed boost as the country awaits final approval of a new $7 billion loan program with the International Monetary Fund (IMF), as reported by Bloomberg. This financial arrangement includes commercial loans and SAFE deposits that are rolled over annually, forming a significant portion of Pakistan’s external financing needs.
The government has requested an extension of the maturity period for loans from China, Saudi Arabia, and the UAE to at least three years, offering more stability under the IMF program. Finance Minister Muhammad Aurangzeb confirmed that the rollover volume would remain consistent with the previous year, emphasizing the importance of these loans in meeting external financing targets.
Pakistan’s reliance on IMF programs has been longstanding, with the current agreement reflecting a 37-month loan program. The country has faced challenges in managing a financing gap of up to $5 billion during the IMF program. The IMF’s Executive Board and financing partners are crucial in securing necessary assurances for the program’s success.
Prime Minister Shehbaz Sharif’s recent efforts to reprofile Pakistan’s debt with China demonstrate ongoing measures to ensure financial stability and economic growth for the country.