ISLAMABAD, Pakistan: Pakistan is planning to borrow over $4 billion from Islamic Development Bank (IDB) to bail out its economy, which is facing a balance-of-payments crisis.
Financial Times reported that Saudi-backed IDB has agreed to make a formal offer to lend Pakistan the money after formation of new government.
According to the report, Pakistan moves to restore its currency reserves when prime minister-in-waiting Imran Khan takes over as PM.
Two officials informed FT that “The paperwork is all in place.” “The IDB is waiting for the elected government to take charge before giving their approval.”
One official at State Bank of Pakistan, who has been involved in negotiations with the IDB said the loan had the backing of the Saudi government, “which wants to play a part in rescuing Pakistan from its present crisis”.
Asad Umar, PTI leader and likely new finance minister has said Pakistan must decide by the end of September if it will go to the IMF to bail out its economy.
“By the end of September, we should make our decision,” Umar, leader of the PTI, which won Pakistan´s elections on July 25 and is now seeking to form a coalition government.
Umar, who is widely tipped to become Khan´s finance minister, reiterated his stance that Pakistan was examining other options as well as the IMF, including loans from friendly countries or remittances from overseas Pakistanis.
Umar said his party has not yet been given access to the official data.
But he was quick to add that while the situation is “dire”, it is not the first time Pakistan has faced such challenges.
“We came out of it earlier, we will come out of it again,” he said.
Analysts say Pakistan needs a loan of around $12 billion to turn the corner.