International Monetary Fund
The International Monetary Fund was created to promote global trade and currency exchange, which it does through advisory and lending functions. IMF membership increased from 39 countries when it was founded in 1946 to 182 countries by November 1999.
International trade and currency exchange was severely damaged by the Depression of the 1930s, which led to a severe loss of confidence among individuals working in international business and finance. There was a high desire to convert paper money into gold because international traders lost faith in the paper money used in international trade. This need was more than what national treasuries could meet.
Pakistan gets financial support from Saudi Arabia to get an IMF agreement, says a minister
Millions at Stake: Saudi Arabia Pledges Record-Breaking Financial Support to Help Pakistan Secure Crucial IMF Deal”
According to Pakistan’s junior finance minister Aisha Ghaus Pasha on Thursday, Saudi Arabia informed the International Monetary Fund that it will finance Pakistan. This is a crucial step towards obtaining IMF funds.
One of the last requirements for an IMF agreement that Islamabad needs in order to avoid a default is Saudi Arabia’s $2 billion pledged in external funding help to Pakistan.
Pasha told reporters in Islamabad, “Apparently Saudi Arabia has committed to IMF, and IMF has indicated to us that there has been a correspondence from them.”
Since the beginning of February, Islamabad has been the site of an IMF mission negotiating a number of policy changes to get $1.1 billion in aid for the cash-strapped economy that is in danger of collapsing.
The money is part of a bailout package of $6.5 billion that the IMF authorized in 2019, which analysts say is essential for Pakistan to avoid defaulting on its responsibilities for external payments.
The agreement will also open up additional bilateral and multilateral funding options for Pakistan, helping it to escape a balance of payment crisis and rebuild its foreign exchange reserves, which have shrunk to just four weeks’ worth of import coverage.
Pasha stated that Islamabad was also in discussions with the UAE to obtain a guarantee for a deposit of foreign reserves in the central bank.