Regional

Pakistan clinches last-gasp $3 billion IMF bailout

Published

3 years ago

June 30, 2023

Pakistan secured a badly-needed $3 billion short-term financial package from the International Monetary Fund on Friday, giving the South Asian economy respite as it teeters on the brink of default.

In a long-awaited decision for Pakistan, the IMF said it had reached a staff-level deal with the 220 million nation, which will now be subject to approval by its board in July.

The new nine-month standby arrangement came hours before a current IMF agreement expires, offering relief to Pakistan, which is battling an acute balance of payments crisis.

Prime Minister Shehbaz Sharif said it would put Pakistan “on the path of sustainable economic growth”.

With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, which analysts say Pakistan’s economic crisis could have spiraled into a debt default in the absence of an IMF deal, Reuters reported.

The deal came only after Sharif held marathon meetings with IMF head Kristalina Georgieva on June 22, which he said represented “a turning point” as the fund’s managing director had not initially appeared very forthcoming.

Pakistan will receive formal documents on the deal later on Friday, Finance Minister Ishaq Dar told Reuters, which he said he would “sign, seal and return by tonight”.

The new deal, which Dar said on Thursday was expected soon, will disburse an upfront amount of $1.1 billion shortly after the IMF board’s meeting in July, he said.

Dar said Pakistan aimed to take the central bank’s foreign exchange reserves to $14 billion by the end of July. “We have stopped the decline, now we have to turn to growth,” he added.

Pakistan’s sovereign dollar bonds were trading higher after the announcement, with the 2024 issue enjoying the biggest gains, up more than 8 cents at just above 70 cents in the dollar, according to Tradeweb data.

The gains were most pronounced in shorter-dated bonds, reflecting lingering skepticism over the longer-term fiscal outlook for the country.

The $3 billion IMF funding is higher than expected as it looks set to replace the remaining $2.5 billion from a $6.5 billion longer-term Extended Fund Facility agreed in 2019.

The deal will also unlock other bilateral and multilateral financing. Long-time allies Saudi Arabia, the UAE and China have already pledged or rolled over billions of loans.

“This will support near-term policy efforts and replenish gross reserves,” the IMF said.

The new arrangement builds on the 2019 programme, IMF official Nathan Porter said in a statement, adding that Pakistan’s economy had faced several challenges in recent times, including devastating floods and rising commodity prices.

“Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Liquidity conditions in the power sector also remain acute,” Porter said.

“Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead.”

Porter also pointed out the power sector’s buildup of arrears and frequent power outages, Reuters reported.

Reforms in the energy sector, which has accumulated nearly 3.6 trillion Pakistani rupees ($12.58 billion) in debt, has been a cornerstone of the IMF talks.

The IMF said it would want steadfast policy implementation by Pakistan to overcome challenges, “particularly in the energy sector”, where it expects a rise in electricity prices.

Dar confirmed that the hike will come ahead of the IMF board review of the bailout, saying the rebasing to be done in July will make about three to four rupees a unit difference.

“Reform does not, must not, mean raising tariff endlessly,” Pakistan’s Minister for Power Khurram Dastgir told Reuters.

With the tenure of the current government ending in August, Dastgir said it had put in place an “aggressive medium-to-long-term plan” to increase renewable energy which was only possible if long-term assistance is available.

Reforms taken

Islamabad has taken measures demanded by the IMF since its mission arrived in Pakistan earlier this year, including revising its 2023-24 budget and a key policy rate hike to 22% in recent days.

It also got Pakistan to raise more than 385 billion rupee ($1.34 billion) in new taxation to meet the IMF’s fiscal adjustments.

The IMF said the central bank should remain proactive to reduce inflation and maintain a foreign exchange framework.

The painful adjustments have already fuelled all time high inflation of 38% year-on-year in May.

“The FY24 budget advances a primary surplus of around 0.4 percent of GDP,” Porter said, adding it will be important that the budget is executed as planned, and authorities resist pressures for unbudgeted spending or tax exemptions.

“This new programme is far better than our expectations,” said Mohammed Sohail of Topline Securities in Karachi, adding there while were a lot of uncertainties on what would happen after a new government comes to power it would “definitely help restore some investor confidence”.

‘Tough journey’ ahead

Meanwhile, on Friday night, Pakistan’s Prime Minister Shehbaz Sharif took to twitter and said while the IMF stand-by agreement “is a much-needed breather, which will help the country achieve economic stability, the nations are not built through loans. I pray for this new program to be the last one.”

He went on to thank Pakistan’s “friends & partners such as China, Saudi Arabia, UAE & Islamic Development Fund for standing by Pakistan at the time of massive economic challenges.

“Under a whole-of-the-government approach, we have worked out an Economic Revival Plan, which will focus on unlocking our strategic potential in agriculture, mine & minerals, defense production & information technology. The Plan will bring up investments of billions of dollars & create job opportunities for four million people.

“It may be a tough journey but as they say, ‘When the going gets tough, the tough gets going’,” he said.

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Regional

Trump extends deadline for striking Iranian energy plants to April 7

Published

9 hours ago

March 27, 2026

Ariana News

U.S. President Donald Trump announced a new extension of his deadline for Iran to reopen the Strait of Hormuz or face the destruction of its energy plants, after Iran rejected his 15-point proposal to end the war he launched with Israel.

Iran gave no direct indication that it was ready for negotiation or compromise. The Islamic Revolutionary Guard Corps issued a statement reaffirming that all shipping “to ‌and from ports of allies and supporters of the Israeli-American enemies” to any destination was prohibited.

The war has spread across the Middle East, killing thousands of people and causing the biggest disruption in history to energy supplies, hitting the global economy with soaring oil, gas and fertiliser prices that have fuelled inflation fears.

The U.S. and Israel launched strikes on Iran on February 28 during talks with Tehran about its nuclear programme that had not yet yielded a deal. Attacks on Israel by Iran’s Lebanese ally Hezbollah then triggered an Israeli onslaught there that has displaced a fifth of Lebanon’s population.

On Thursday, Trump threatened during a cabinet meeting to increase pressure on Iran if it did not make a deal. He later posted on social media that he would pause threatened attacks on Iranian energy plants for 10 days until April 6 at 8 p.m. Eastern daylight time (0000 GMT on April 7).

“Talks are ongoing and, despite erroneous statements to the contrary by the Fake News Media, and others, they are going very well,” ⁠he added in his Truth Social post.

Regional

Russia sought to blackmail US using intelligence to Iran, Zelenskiy says

Zelenskiy, who said on Monday that Ukraine’s military intelligence has “irrefutable” evidence that Russia is continuing to provide intelligence to Iran.

Published

2 days ago

March 26, 2026

Ariana News

Russia sought to blackmail the United States by offering to stop sharing military intelligence with Iran if, in return, Washington would cut off Ukraine from its intelligence data, President ‌Volodymyr Zelenskiy said on Wednesday.

Zelenskiy, who said on Monday that Ukraine’s military intelligence has “irrefutable” evidence that Russia is continuing to provide intelligence to Iran, told Reuters he had seen the data but provided no further details, Reuters reported.

Speaking in his presidential compound in Kyiv, Zelenskiy ⁠said that some Iranian drones, used to attack U.S. military assets and its allies during the war in the Middle East, contained Russian components.

“I have reports from our intelligence services showing that Russia is doing this and saying: ‘I will not pass on intelligence to Iran if America stops passing intelligence to Ukraine.’ Isn’t that blackmail? Absolutely,” Zelenskiy said.

He did not say who, according to the reports, Russia was addressing ‌the ⁠comments to. Russia has denied assisting Iran in its month-old conflict with the United States and Israel – a denial that Washington said earlier this month that it had also received directly from Moscow when the issue was discussed.

Ukraine, ⁠which has faced sustained attacks by Iranian-designed Shahed drones since Russia launched its invasion in 2022, is helping several Gulf states – including Saudi Arabia, the United Arab ⁠Emirates, and Qatar – to counter drone attacks on their territory, the president said.

Zelenskiy said he hoped that Ukraine would be able to ⁠reach long-term deals with some Gulf countries that would raise funds for the production of Ukrainian drone interceptors or receiving much-needed air-defence missiles, read the report.

Regional

Israel strikes Tehran as Trump says US negotiating to end war

Published

3 days ago

March 25, 2026

Ariana News

Israel struck the Iranian capital Tehran on Wednesday, Israeli military and Iranian media said, as President Donald Trump said the U.S. was making progress in its efforts to negotiate an end to the war, with reports of a 15-point plan sent to Tehran.

The Israeli Defense ‌Forces said in a Telegram post it had launched a wave of strikes targeting infrastructure across Tehran. The semi-official Iranian SNN News Agency said the strikes hit a residential area in the city, with rescuers searching the rubble, Reuters reported.

Kuwait and Saudi Arabia said on Wednesday they had repelled fresh drone attacks, without stating where they originated. Drones targeted a fuel tank at Kuwait International Airport, causing a fire but no casualties, Kuwait’s Civil Aviation Authority said.

Iran’s Revolutionary Guards said it had launched a new wave of attacks against locations in Israel including Tel Aviv and Kiryat Shmona, as well as U.S. bases in Kuwait, Jordan and Bahrain, Iranian state media ⁠reported.

Trump said on Tuesday the U.S. was in “negotiations” to end the war, which has already killed thousands and created the worst energy shock in history, leading to global fuel shortages and roiling markets.

Stocks rose and oil prices fell on Wednesday on reports the U.S. is seeking a month-long ceasefire and had sent a 15-point plan to Iran for discussion, raising hopes for a resumption of oil exports out of the Persian Gulf.

Trump told reporters at the White House the U.S. was talking to “the right people” in Iran to end hostilities, adding the Iranians wanted to reach a deal very badly.

Iran’s powerful parliament speaker Mohammad Baqer Qalibaf on Monday dismissed such reports as “fake news.”

15 POINT PLAN SENT TO IRAN

The New York Times reported on Tuesday that Washington sent Iran a 15-point plan to end the war in the Middle East. Israel’s Channel 12, quoting three sources, said the U.S. was seeking a month-long ceasefire to discuss the 15-point plan.

A source familiar with the matter confirmed that the U.S. had sent a plan to Iran but provided no ‌further details.

The ⁠Israeli media outlet said the plan would include the dismantling of Iran’s nuclear programme, ceasing support for proxy groups, such as Lebanon’s Hezbollah, and the reopening of the Strait of Hormuz.

The U.S. and Israel launched strikes on Iran on February 28 after saying they had failed to make enough headway in talks aimed at ending Iran’s nuclear programme, although mediator Oman said significant progress had been made.

Since then, Iran has attacked countries that host U.S. bases, struck Gulf energy infrastructure and effectively closed the Strait of Hormuz, conduit for a fifth of the world’s oil and liquefied natural ⁠gas.

Iran has told the United Nations Security Council and the International Maritime Organization that “non-hostile vessels” may transit the Strait of Hormuz if they coordinate with Iranian authorities, according to a note seen by Reuters on Tuesday.

The effective closure of the waterway, where 20% of the world’s oil and gas normally transits, has created the worst energy supply shock in history, sent fuel prices soaring, ⁠and disrupted global aviation.

PAKKISTAN OFFERS TO HOLD US-IRAN TALKS

Pakistan’s Prime Minister Shehbaz Sharif said on Tuesday he was willing to host talks between the U.S. and Iran on ending the war, a day after Trump postponed threats to bomb Iranian power plants after what he called “productive” talks.

Pakistan has long-standing ties to neighbouring Iran’s Islamic Republic and has been building ⁠a relationship with Trump.

Despite reports of negotiations, the Pentagon is expected to send thousands of soldiers from the U.S. Army’s elite 82nd Airborne Division to the Middle East, two people familiar with the matter told Reuters on Tuesday, adding to a massive U.S. military buildup.

The forces will add to the 50,000 U.S. troops already in the region and accelerate Washington’s massive U.S. military buildup there, fuelling fears of a longer conflict.