Pakistan plans to borrow over $4 billion from the Jeddah-based Islamic Development Bank to bolster the country’s low level of foreign currency reserves, the Financial Times reported.
The report said that two officials told the paper that the bank has agreed to make a formal offer after Pakistan Tehreek-e-Insaf (PTI) chief Imran Khan forms government as prime minister. The bank also expects Asad Umar, tipped for finance minister, to accept the offer.
In addition, a senior advisor in Islamabad said the paperwork is all in place. “The IDB is waiting for the elected government to take charge before giving their approval.”
He termed the amount an “important contribution.”
Another official at the State Bank of Pakistan, who was part of negotiations with the IDB, confirmed the loan had the backing of the Saudi government, “which wants to play a part in rescuing Pakistan from its present crisis.”
Umar has previously said that Pakistan must decide by the end of September if it would go to the International Monetary Fund (IMF) to bail out its economy.
He reiterated his stance that Pakistan was examining other options as well as the IMF, including loans from friendly countries or remittances from overseas Pakistanis.
He spoke a week after the US raised fears that Pakistan could use any bailout from the IMF to pay off debts to China.