Pakistan has secured commitments from China, Saudi Arabia and the United Arab Emirates to roll over debt for a year, a boost for the government as it awaits final approval of a new $7 billion loan programme with the International Monetary Fund (IMF), Bloomberg reported on Tuesday.

Pakistan has a peculiar financial arran­gement with these three countries in the shape of commercial loans and SAFE deposits that are rolled over every year and form a major part of the IMF programme in terms of external financing needs.

Pakistan has now requested the maturity period of these loans — $5bn from China, $4bn from Saudi Arabia, and $3bn from the UAE — to be extended to at least three years, offering greater predictability under the IMF programme.

Bloomberg said Finance Minister Muhammad Aurangzeb told reporters in Islamabad after a parliamentary committee meeting that the volume of rollovers would be the same as last year, adding that the country has $12bn in bilateral loans that have been extended for the past few years.

The federal government and the International Monetary Fund reached an agreement for a 37-month loan programme in July. Pakistan has relied heavily on IMF programmes for years, at times nearing the brink of sovereign default and having to turn to countries such as the UAE and Saudi Arabia to provide it with financing to meet external financing targets set by the IMF.

Bloomberg reported that Aurangzeb said the government expected to manage a financing gap of as much as $5bn during the fund’s three-year programme.

The IMF in its statement following the staff-level agreement said the new Extended Fund Facility programme was subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.

The finance ministry did not immediately respond to a Reuters’ request for comment.

Last week, Prime Minister Shehbaz Sharif said he had written a letter to the Chinese government requesting debt reprofiling for Pakistan.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Islamabad protest
Updated 20 Nov, 2024

Islamabad protest

As Nov 24 draws nearer, both the PTI and the Islamabad administration must remain wary and keep within the limits of reason and the law.
PIA uncertainty
20 Nov, 2024

PIA uncertainty

THE failed attempt to privatise the national flag carrier late last month has led to a fierce debate around the...
T20 disappointment
20 Nov, 2024

T20 disappointment

AFTER experiencing the historic high of the One-day International series triumph against Australia, Pakistan came...
Tribunals’ failure
Updated 19 Nov, 2024

Tribunals’ failure

With election tribunals having failed to fulfil their purpose, it isn't surprising that Pakistan has not been able to stabilise.
Balochistan MPC
19 Nov, 2024

Balochistan MPC

WHILE immediate threats to law and order must be confronted by security forces, the long-term solution to...
Firm tax measures
19 Nov, 2024

Firm tax measures

FINANCE Minister Muhammad Aurangzeb is ready to employ force to make everyone and every sector in Pakistan pay their...