Pakistan ‘confident’ of meeting IMF condition of external loans

Pakistan is set to fulfil a key International Monetary Fund (IMF) condition by securing timely loans and rollovers from friendly countries.

According to the Ministry of Finance sources, the government is optimistic about the rollover of $12 billion in deposits from allied nations. Saudi Arabia, China, and the United Arab Emirates have assured Pakistan of rolling over their loans on time.

Currently, Saudi Arabia holds $5 billion in time deposits within Pakistan’s foreign exchange reserves, while the UAE has placed $3 billion and China maintains $4 billion in safe deposits.

Out of the $26 billion external debt due in the current fiscal year, Pakistan has already repaid $3.5 billion, which includes $1.5 billion in cash payments and $2 billion in rollovers, sources said.

The Ministry of Finance added that the timely repayment of the remaining obligations will also be ensured.

Officials asserted that, in line with the IMF program requirements, all loans from friendly countries will be rolled over.

Furthermore, Pakistan has arranged for the payment of a $500 million Eurobond due on September 30. Sources clarified that this repayment will not put additional pressure on the country’s foreign reserves.

The financing gap is expected to be bridged through continued support from partner nations, the ministry assured.

Meanwhile, the Pakistan government has also initiated efforts to secure maximum relief during the ongoing review talks with the International Monetary Fund (IMF), sources told ARY News.

As per details, Prime Minister Shehbaz Sharif has directed the authorities to negotiate broader concessions amid floods and heavy rains during the upcoming review talks with IMF, sources said.

Earlier, the International Monetary Fund expressed deep condolences for the loss of life caused by Pakistan’s devastating floods and said its upcoming Extended Fund Facility review mission will evaluate whether the country’s fiscal policies and emergency provisions can effectively address the crisis, a senior IMF official said.

“The mission will assess whether the FY26 budget, its spending allocations and emergency provisions remain sufficiently agile to address the spending needs necessitated by the floods,” said Mahir Binici, the IMF’s resident representative in Pakistan. The flash floods have killed 972 people so far, according to Pakistan’s National Disaster Management Authority. The floods have destroyed crops, livestock and homes across Punjab province and are now pushing into Sindh, threatening fresh food inflation and deeper hardship in the cash-strapped South Asian nation.

An analyst estimated agricultural damage could shave up to 0.2 percentage points off growth this year, with reconstruction-led demand offering only partial offset.

IMF’s board approved a fresh $1.4 billion loan in May to help Pakistan strengthen its economic resilience to climate vulnerabilities and natural disasters.

Earlier this month, Pakistan signed $8.5 billion in new investment agreements with China during a visit to Beijing by Prime Minister Shehbaz Sharif, Pakistan’s state media reported.

The accords finalised in the Chinese capital city include $7 billion in a memoranda of understanding and $1.5 billion in joint ventures covering agriculture, renewable energy, electric vehicles, health, steel and other sectors.

Sharif travelled to Beijing for the annual summit of the Shanghai Cooperation Organization and met with Chinese leaders on the sidelines.

Sharif unveiled the next phase of the China-Pakistan Economic Corridor at the conference, vowing to cut bureaucratic hurdles to speed up projects. In televised remarks, he assured Chinese investors that his government would enhance security for their workers.

CPEC includes building and improving roads and rail systems to link western China’s Xinjiang region to Pakistan’s Gwadar port on the Arabian sea. It is part of Xi’s Belt and Road Initiative to increase trade by building infrastructure around the world.

Thousands of Chinese work in Pakistan on CPEC-linked projects. Some have been targeted in attacks by Baloch separatists and Pakistani Taliban militants, prompting repeated calls from Beijing for stronger protections.

Last month, The World Bank will provide Pakistan with a $20 billion loan at a concessional interest rate of just 2% over a 10-year period.

Sources divulged on Saturday, the funding will support six priority sectors, including climate resilience, poverty alleviation, health, education, child stunting reduction and inclusive development. The sources within the Ministry of Finance have made it clear that clean energy, improved air quality and the promotion of private investment have also been identified as key areas of focus.

Agencies