Qatar agrees to provide $2 billion in financial aid to Pakistan

By Staff Reporter

KARACHI: Qatar has agreed to extend $2 billion in bilateral support to help ease Pakistan’s funding crunch ahead of the International Monetary Fund’s (IMF) board meeting due on August 29, the central bank said on Monday.

Pakistan will also get $1 billion in oil financing from Saudi Arabia and a similar amount in investments from the UAE. All the funds are expected over twelve months.

Murtaza Syed, acting governor at the State Bank of Pakistan said Prime Minister Shehbaz Sharif is visiting Qatar on August 23 and 24, and “an announcement of the assistance may or may not be announced during the trip”.

Pakistan last week sent back an agreed LoI to the IMF, requesting the board of Washington-based lender to release two tranches worth $1.17 billion and an additional one billion dollars along with a year’s extension in the bailout loan facility.

The board review would pave the way for the release of the much-awaited loan tranches that had been on hold since earlier this year. The IMF and Pakistan reached a staff-level agreement on the combined reviews of the bailout in July.

Pakistan’s gross financing needs during the current fiscal year are projected at $35 billion. The country had completed arrangements for $4 billion in bilateral financing from friendly countries, which was the last hitch to the bailout package after the completion of all the prior actions agreed under the IMF programme.

Three years ago, the Pakistan government under Prime Minister Imran Khan had inked a 39-month $6 billion programme with the IMF. The present coalition government had sought an additional one billion dollars and a year’s extension in the facility, to which the IMF agreed.