Pakistan’s Prime Minister, Shehbaz Sharif, expressed hope on Wednesday that the International Monetary Fund (IMF) board would grant final approval for a $3 billion short-term bailout for Pakistan during its meeting on July 12.
After eight months of negotiations, both parties signed a staff-level agreement last Friday (June 30) to prevent an imminent default on sovereign debt.
Finance Minister Ishaq Dar stated that Pakistan would receive an initial installment of $1.1 billion, pending the IMF board’s approval for fund disbursement.
Speaking at a ceremony in Islamabad, Sharif said, “God willing, the final approval by the IMF (International Monetary Fund board) is going to be done on July 12. Staff level agreement has already been done. I have already announced the details which I will not repeat here. But I will say it here that China has held our hand during a difficult time.”
Sharif also expressed gratitude to longstanding allies China, Saudi Arabia, and the United Arab Emirates for their support during the government’s negotiations with the IMF.
These allies had committed to providing bilateral financing or extending debt maturity to help mitigate the depletion of Pakistan’s foreign currency reserves, which stood at just under $4 billion by the end of last month, barely sufficient to cover a month of controlled imports.
The government was in dire need of the IMF bailout to prevent the worsening balance of payments crisis, especially in the face of a soaring inflation rate, reaching a record high of 38% annually in May.