September 27, 2020

IMF Board Meeting In Washington, Saudi Arabia And China Confirm They Would Maintain Exposure

On July 5, 2019, in Washington, a Board meeting of the IMF was held. In which, Saudi Arabia and China confirmed the IMF Executive Directors (EDs) that they would maintain exposure to Pakistan’s role over debt. This means that the countries will give loans despite the high risk of Pakistan not being able to pay the loans back.

On May 12, 2019, IMF said on their website that, “financing support from Pakistan’s international partners will be critical to support the authority’s adjustment efforts and ensure that the medium-term program objectives can be achieved.”

The board welcomed Saudi Arabia’s step of providing $9.9 billion worth of oil to Pakistan over the course of three years, under the Extended Fund Facility. Moreover, IMF EDs complimented Pakistan’s efforts on working on the conditions put forward by IMF, which had to be met before the meeting on July 3rd 2019.

Pakistan has been given a $6 billion dollar bailout package by the IMF. $1 billion was released on the day of the meeting, on 3rd July 2019 and the rest would be given over a 39 month period.

Many EDs of the IMF said that their trust in Pakistan was a “leap of faith”. While other EDs called for precautionary measures to prepare for circumstances where Pakistan fails to stay on the decided track.

The EDs were so far satisfied with Pakistan’s transparency, measures to raise revenue and tight monetary and fiscal policies. They also discussed the upcoming FATF meet in October and urged Pakistan to implement the action plan put forward by the FATF by October.

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