Pakistan is seeking an additional $1.5 billion loan from Saudi Arabia to help secure an IMF bailout
Pakistan has asked Saudi Arabia to extend its support by providing an additional $1.5 billion loan on top of the existing $5 billion loan portfolio. This extra funding is crucial for meeting the external financing requirements needed to secure a 37-month bailout package from the International Monetary Fund (IMF).
The IMF has stipulated that Pakistan must confirm the rollover of $12 billion in loans from its three major bilateral partners—Saudi Arabia, China, and the UAE—before it can approve the bailout. Currently, Saudi Arabia’s commitment stands at $5 billion, China’s at $4 billion, and the UAE’s at $3 billion.
According to reports, Pakistan has requested the additional $1.5 billion from Saudi Arabia, which might come as either a bilateral commercial loan or a secure deposit. Saudi Finance Minister Mohammed Al-Jadaan has indicated support for this request, but the final arrangements are still pending.
In parallel, Pakistan’s Finance Minister Muhammad Aurangzeb and his team are seeking further financial support from commercial banks in the UAE and are in talks with Western banks. However, the interest rates offered by these Western banks are less favorable due to Pakistan’s current economic and political climate.
Recent discussions with bank executives from Mashreq Bank and Dubai Islamic Bank, along with meetings with the Saudi finance minister, have shown willingness to provide $300-350 million each for the current fiscal year. These funds may be complemented by sukuk bonds in the following year.
