UAE assures IMF to bridge Pakistan’s $6.5billion external financing gap

By Shahzad Paracha

ISLAMABAD: In a major development, the United Arab Emirates (UAE) has assured the International Monetary Fund (IMF) of its commitment to bridging Pakistan’s $6.5 billion external financing gap.

Sources reveal that on Tuesday, the IMF mission chief held a meeting with the UAE Ambassador in Pakistan to discuss the significant external financing challenge faced by Pakistan.

Reportedly, the UAE ambassador has pledged to play a role in stabilizing Pakistan’s economy, addressing the pressing issue of the $6.5 billion financing gap.

Simultaneously, the IMF mission is also seeking confirmation from Pakistan regarding external financing.

Pakistan, grappling with a substantial $6.5 billion external financing gap, has decided to seek assistance from friendly nations, including Saudi Arabia and the UAE.

Sources indicate that the Pakistani government will also approach the Islamic Development Bank, Asian Development Bank, and the World Bank for financial aid to alleviate the current account deficit.

IMF holds intensive talks with Pakistan’s bilateral partners to address financing gap

Highlighting the severity of the economic situation, sources reveal that Pakistan’s Current Account Deficit (CAD) stood at $947 million in the first three months of the current fiscal year.

Additionally, it has been disclosed that Pakistan and the IMF have reached an agreement not to increase the interest rate by more than 2%. The Monetary Policy Committee, which operates independently, holds the authority to make decisions regarding the interest rate.

Sources further indicate that the IMF has been briefed on plans to expand the tax net by bringing one million more people into the system.

According to Finance Ministry sources, policy-level negotiations between Pakistan and the IMF are currently underway, with expectations that staff-level agreements will be concluded by tomorrow (Wednesday).