The Islamic Development Bank (IDB) was providing a three-year USD 4.5 billion oil financing facility to Pakistan, the country said on Saturday, adding the aid will ease pressure on its balance-of-payments. According to the finance ministry, USD 1.5 billion worth of oil on deferred payment each year by the bank had been agreed. The program will continue for three years.
Pakistan received oil worth USD 100 million in the first phase under the agreement with IDB, the ministry said, as the facility was already activated in July 2018.
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Pakistan is also negotiating a USD 8 billion bailout package from the International Monetary Fund (IMF) to overcome a severe balance-of-payments crisis that threatens to cripple the country's economy.
The country has received financial help to a great extent ever since Prime Minister Imran Khan assumed office in August, as the government reached out to some "friendly countries" for economic assistance including Saudi Arabia, China and the UAE.
The government was also working with the IDB for a similar agreement to provide Liquefied Natural Gas (LNG) on deferred payments.
The arrangement with the IDB is in addition to agreement with Saudi Arabia to provide oil worth USD 3 billion on deferred payments.
Officials said the oil supply under arrangement with Saudi government will start by middle of February.
Pakistan is also engaged with the UAE to get a facility on the pattern of Saudi Arabia.
Both Saudi Arabia and UAE also agreed to provide USD 3 billion each to ease pressure.
Riyadh has already credited the pledged USD 3 billion while UAE has provided USD 1 billion so far.
Pakistan foreign reserves were boosted after payments by the friendly countries, giving enough time to the government to negotiate a bailout package with the IMF, according to officials.
(With PTI inputs)