Saudi Arabia and IMF Support Pakistan's Economic Turnaround

Pakistan recently received a major boost after the IMF approved a $3 billion Standby Arrangement (SBA) loan to help the cash-strapped country. The Executive Board of the IMF has already met on July 12 to review the SBA for Pakistan. Finance Minister Ishaq Dar said that State Bank of Pakistan (SBP) has received a deposit of $2 billion from the Kingdom of Saudi Arabia.

This inflow has increased the foreign exchange reserves held by SBP and will accordingly be reflected in the forex reserves for the week ending 14 July 2023. Prime Minister Shehbaz Sharif expressed deep gratitude to the “leadership and brotherly people of the Kingdom of Saudi Arabia” for the deposit. He thanked Crown Prince Mohammed bin Salman for ensuring this financial support to Pakistan. Similarly, the UAE had also promised assistance which helped Pakistan to convince the IMF that it had enough backing to fulfil its conditions to improve the balance of payments. According to data released by the SBP on Monday, the cash-strapped country lost over $4 billion in remittances sent by expatriates to illegal channels in the current fiscal year. It is hoped that the influx of funds from Saudi Arabia and the UAE, along with the IMF loan, will go a long way in helping the country’s economy to get back on track. 

The country’s foreign exchange reserves have already shown improvement for the second consecutive week, when they reached $4.4 billion. It is now time for the government to ensure transparency and accountability, keeping in mind the welfare of the people. With the help of sustained efforts and effective measures, Pakistan can make progress in the right direction and bring about a much-needed improvement in the lives of its people.