To cater to the problem of restoring foreign currency reserves that have run into very low stock, Pakistan is planning to take Loan of $4 billion from the Islamic Development Bank (IsDB) backed by Saudi Arabia.
The bank has agreed to lend the amount to Pakistan once Imran Khan took oath as Prime minister.
The documentation is all prepared and once the government takes up charge it can be furnished accordingly.
This will be an important contribution but it is a known fact that it will not cover the financing gap of $25 billion incurred by Pakistan.
Only $10 billion is in central bank reserves and almost $9 billion is our short-term liabilities which means our net reserves are close to nothing, said Asad Umar.
As per the newspaper report, officials have already drawn up plans to borrow up to $12bn from the International Monetary Fund — through such a bailout is likely to come with strings attached, such as a demand to see the details behind billions of dollars’ worth of Chinese loans.
Mr. Umar, it added, was, therefore, exploring what other options remained open to him, of which the IsDB loan was one. Officials said the loan would be used mainly to pay for oil imports, with higher crude prices have contributed to the country’s problems.