Washington welcomes IMF’s decision to approve bailout package for Pakistan

In this picture, taken on September 26, 2022, US Secretary of State Antony Blinken speaks after his meeting with Pakistan's Foreign Minister Bilawal Bhutto-Zardari at the State Department in Washington, DC. (AFP/File)
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Updated 14 July 2023
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Washington welcomes IMF’s decision to approve bailout package for Pakistan

  • US Secretary of State Antony Blinken urges Pakistan to bring about macroeconic stability, sustainable economic recovery
  • Pakistan received $1.2 billion in funds from the IMF on Thursday, a day after the lender approved its bailout package

ISLAMABAD: US Secretary of State Antony Blinken welcomed the International Monetary Fund’s (IMF) move to approve a $3 billion bailout package for Pakistan on Thursday, urging Islamabad to work with the lender to bring about macroeconomic reforms.

Pakistan breathed a sigh of relief on Wednesday when the international lender formally approved the $3 billion stand-by agreement (SBA) for Pakistan which helped the South Asian country, teetering on the edge of a sovereign default, shore up its foreign reserves.

Timely deposits of $2 billion and $1 billion in the State Bank of Pakistan (SBP) by Saudi Arabia and the UAE, respectively, also helped boost investors’ confidence in Pakistan and brought about bullish sentiments in the country’s capital markets.

“We stand by the Pakistani people during these hard times and welcome the International Monetary Fund’s approval of a program to support Pakistan,” Blinken wrote on Twitter.

He urged Islamabad to continue working with the IMF to bring about macroeconomic stability and sustainable economic recovery.

Pakistani officials, particularly Finance Minister Ishaq Dar, held several meetings with American officials in recent months to convince Washington to exert its influence over the IMF and push the lender to approve Pakistan’s bailout program.

After the formal approval from IMF’s Executive Board, Pakistan received inflows of $1.2 billion from the international lender on Thursday.

After the latest inflows, Pakistan’s overall foreign exchange reserves are expected to hit the $13-14 billion mark from the $9.8 billion figure recorded on July 7, 2023.

Pakistan’s official reserves are expected to increase to $8-9 billion, which would be reflected in the central bank’s data on Friday.


Pakistan says it backs Gaza peace plan, hopes next phase leads to Palestinian state

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Pakistan says it backs Gaza peace plan, hopes next phase leads to Palestinian state

  • Foreign Office says it is not concerned about who joins or stays out of the Abraham Accords
  • Pakistan reaffirms rejection of Israel’s recognition of Somaliland, warns of regional instability

ISLAMABAD: Pakistan’s Foreign Office said on Thursday it supported the Gaza peace plan endorsed by the United Nations Security Council, expressing hope its next phase would stabilize the situation in the war-ravaged territory, scale up humanitarian assistance and lead to an independent Palestinian state.

The United States said on Wednesday it was moving into the next phase of a Gaza ceasefire plan. President Donald Trump’s Middle East envoy Steve Witkoff said in a post on X that the second phase will establish “a transitional technocratic Palestinian administration in Gaza” and mark the beginning of “the full demilitarization and reconstruction of Gaza, primarily the disarmament of all unauthorized personnel.”

Commenting on the development, Foreign Office Spokesperson Tahir Andrabi said Pakistan had taken note of the announcement.

“We have seen this social media post about the next phase of the ceasefire agreement in Gaza, and we express the hope that these steps will lead to further stabilization of the situation, and upscaling the humanitarian assistance and end of the sacrifices of the people,” he said while addressing his weekly news conference.

Andrabi said Pakistan had been engaged in the Gaza peace effort as part of a group of Arab and Islamic countries since the initiative was presented by the US president and supported both the plan and the UN Security Council resolution endorsing it.

“We also hope that these efforts will lead to a credible time bound, political process consistent with international legitimacy and relevant UN resolutions to establish an independent, sovereign, contiguous state of Palestine, based on pre-1967 borders with East Jerusalem as its capital,” he added.

Asked about Pakistan’s position on the Abraham Accords, a series of US-brokered agreements normalizing relations between Israel and several Arab states, Andrabi said Islamabad’s stance remained unchanged.

“Our position with respect to it is that there are certain benchmarks that have to be achieved ... And [these relate do] a viable, contiguous state of Palestine, with East Jerusalem as its capital.”

He said Pakistan did not judge other countries’ choices on the accords.

“We are not concerned about who does or who does not join the Abraham Accords,” he said.

SOMALILAND ISSUE

Earlier in his opening remarks, Andrabi reiterated Pakistan’s rejection of Israel’s recognition of Somaliland, a self-declared breakaway region of Somalia, calling the move illegal and warning it could destabilize the Horn of Africa and Red Sea region.

Somaliland declared independence from Somalia in 1991 but is not recognized by the United Nations or the African Union.

Israel’s recent steps to recognize the territory have drawn criticism from Somalia and several Muslim-majority countries.

Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar raised the issue during the 22nd Extraordinary Session of the Organization of Islamic Cooperation Council of Foreign Ministers held in Jeddah on Jan. 10.

“In his address, the DPM-FM strongly condemned the illegal and unlawful recognition by Israel of the Somaliland region, as well as subsequent unwarranted and highly provocative visits of Israeli officials to the territory,” the Foreign Office spokesman said.

“He termed such acts as political aggression and a direct assault on Somalia’s internationally recognized borders, setting a perilous precedent and threatening peace and security in the Horn of Africa, the Red Sea region, and beyond.”

Andrabi said Dar also addressed the Palestinian issue during the session, rejecting proposals for the displacement of Palestinians and reaffirming Pakistan’s long-standing support for a two-state solution.