FILE PHOTO: A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo
Pakistan will pay around a 5 percent interest rate on the International Monetary Fund’s (IMF) $7 billion new bailout package.
According to information obtained by ProPakistani, the tenor includes a grace period is 10 years with payment to be made in 12 equal semi-annual installments.
The breakdown of the interest shows that Pakistan will pay interest at the SDR rate plus 1 percent. Moreover, a service charge of 50 basis points is applied to each amount drawn.
The commercial loans obtained by the federal government have an interest rate of around 7 to 8 percent, a lot high than interest being charged by IMF. These loans have been sourced from Bank of China (BoC), China Development Bank (CDB) and Industrial and Commercial Bank of China (ICBC).
Back in late September, IMF’s Executive Board concluded the 2024 Article IV consultation and approved a 37-month Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan in the amount of SDR 5,320 million (around $7 billion).
The Board’s decision also allowed for an immediate disbursement of SDR 760 million (or about $1 billion).