Renowned businessman Arif Habib said on Thursday that the International Monetary Fund (IMF) program will lead to Pakistan's financial credibility.
Expressing his thoughts, Habib said: "The IMF deal has given the message that the friendly countries are standing with Pakistan. Pakistan will witness an increase in liquidity by getting $1 billion."
"The interest rate will go down with the increase in liquidity. It is due to the weakened economy that Pakistan had to approach the international lender."
"The IMF is of the view that you should prepare the budget in line with your capital," said Habib.
It is pertinent to mention that Pakistan is likely to get $1 billion or $1.1 billion as the first instalment of the loan by September 30. After the approval of the loan program, the second installment will also be received in the same financial year, the sources added.
The expected approval of the loan follows a staff-level agreement reached between Pakistan and the IMF on July 12. Pakistani officials have confirmed that all preconditions for the loan, including securing $2 billion in additional financing and consolidating $12.7 billion in debt, have been fulfilled.
China, Saudi Arabia, the UAE, and Kuwait have also provided crucial support by deferring Pakistan’s loan payments for one year.
As part of the IMF's preconditions, Pakistan has borrowed from international commercial banks at an interest rate of 11%, one of the highest rates in the country’s history.
