In a major boost to Pakistan, Saudi Arabia has assured the International Monetary Fund (IMF) it will provide a $2 billion loan to the South Asian country facing one of its worst economic crises in decades, said Minister of State for Finance Aisha Ghaus Pasha.

The international lender has indicated it has the assurance from the Pakistani ally, Pasha told reporters in Islamabad.

However, the IMF agreement still rests on a similar commitment from the United Arab Emirates for a $1 billion loan, added the minister.

Business Recorder reached out to the IMF, but it did not immediately respond to a request for a comment.

Last month, the international lender had said it needs to ensure financing assurances are in place in order to take “the next step with Pakistan”.

“Timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review [with Pakistan],” Julie Kozack, the IMF’s Director of Strategic Communications, stated back then.

“Ensuring that there is sufficient financing to support the authorities is the paramount priority. A Staff Level Agreement (SLA) will follow once the few remaining points are closed,” she said.

Technical-level talks with IMF are over: Ishaq Dar

Following the development, Ghaus Pasha said the staff-level agreement on the 9th review was taking time because the IMF wants to independently verify commitments from friendly countries i.e. Saudi Arabia and the UAE.

Months of political and economic turmoil, worsened by crippling floods last year and record inflation, has put Pakistan among countries facing a debt crisis.

China agreed to refinance $2 billion, of which $1.7 billion has already been credited to Pakistan’s central bank. China last month also rolled over a $2 billion loan, providing relief during Pakistan’s acute balance of payments crisis.

But talks with the IMF for a delayed $1.1 billion loan tranche, part of the bailout agreed in 2019, have dragged on and foreign exchange reserves have fallen to less than four weeks of imports.