Pakistan has arranged $761.5 million in Murabaha financing from the International Islamic Trade Finance Corporation (ITFC) to import petroleum products on deferred payment.
The development was announced in a series of tweets by Economics Affairs Division (EAD) on 4 November.
As a result of successful discussions between Minister @OmarAyubKhan and Eng. Hani Salem Sonbol, CEO, @ITFCCORP, Pakistan has secured US$ 761.5 million Murabaha Financing for import of petroleum products on deferred payment. @FinMinistryPak @StateBank_Pak @appcsocialmedia pic.twitter.com/ccLgaAmHnW
— Economic Affairs Division, Government of Pakistan (@eadgop) November 4, 2021
The ITFC has increased Pakistan’s Murabaha financing facility from $300 million to $761.5 million, which Pakistan State Oil (PSO), the Pak-Arab Refinery Company Limited (PARCO), and Pakistan LNG can utilize to import oil and gas from the international market.
The EAD said that the increase in the financing limit is due to the higher demand in the country amid the strong recovery of the economy.
The financing facility was announced after a discussion between the Minister for Economic Affairs, Omar Ayub Khan, and the CEO of the ITFC Hani Salem Sonbol.
According to the EAD, the “ITFC financing will help to ease pressure on the exchange rate and stabilize forex reserves. It also reflects the confidence of IFIs in Pakistan’s economy. ITFC & EAD also agreed to continue their cooperation in future for maximum utilization of US$ 4.5 billion financing window”.
The government is taking steps to maintain its dollar reserves and exchange rate against the backdrop of the prices of commodities and petroleum products hovering at historic highs.
Saudi Arabia also recently extended support to Pakistan and resumed a $1.5 billion per year oil facility on deferred payments and $3 billion in safe deposits. The $4.5 billion eased the pressure on the exchange rate as the Pakistani Rupee gained Rs. 2.48 against the greenback in a single day on 28 October after reaching an all-time low of Rs. 175.27 per Dollar.