IMF Further Delays Pakistan’s $7bn Loan Approval Due to Financing Issues

The International Monetary Fund (IMF) has once again postponed the approval of Pakistan’s $7 billion loan package, further prolonging the country’s wait for crucial financial assistance. Sources indicate that the delay is primarily due to the non-timely rollover of a $12 billion loan from friendly countries.

The latest IMF Executive Board schedule, released through August 30, does not include Pakistan’s request for a new loan program. Instead, the board will review applications from three other countries, including Vietnam, between August 28 and 30. This development has raised concerns about the timeline for the disbursement of the loan, which is vital for Pakistan’s economic stability.

The IMF has placed stringent conditions on Pakistan, requiring assurances of external financing before the board meeting. Currently, Pakistan holds deposits of $5 billion from Saudi Arabia, $4 billion from China, and $3 billion from the UAE. The Pakistani government has been working to secure the rollover of these deposits and the refinancing of commercial loans to meet the IMF’s conditions.

The delay in the approval comes at a critical time, as Pakistan faces external payment obligations totaling $26.4 billion this year, including significant commercial debt. The IMF loan program, which is set to span 37 months, is expected to provide essential financial support to stabilize Pakistan’s economy, boost foreign reserves, and address ongoing fiscal challenges.

Despite the delay, there is still a possibility that the IMF Executive Board could add Pakistan’s loan request to the agenda outside the official schedule. The delay follows a staff-level agreement reached on July 12, with the expectation that the Executive Board would meet within four to six weeks to finalize the agreement. Pakistan now faces an extended wait, adding to the financial uncertainty that has gripped the nation.