IMF aims to ‘quickly’ reach agreement with Pakistan on funding

ISLAMABAD: International Monetary Fund’s (IMF) mission chief Nathan Porter on Tuesday said it was continuing discussions with Pakistani authorities with the aim of ‘quickly’ reaching agreement on financial support, ARY News reported.

“Over the past few days, the Pakistani authorities have taken decisive measures to bring policies more in line with the economic reform programme,” Nathan Porter said in a statement.

Giving details, he said the measures include “the passage of a budget by the parliament that broadens the tax base while opening up space for higher social and development spending as well as steps towards improving the functioning of the foreign exchange market and tightening monetary policy to reduce inflationary and balance of payment pressures that affect particularly the more vulnerable”.

The IMF’s mission chief noted that the country’s decisions have improved issues related to loan programme. “The IMF team continues discussions with Pakistani authorities with the aim of quickly reaching an agreement on financial support,” he added.

The statement came hours after Prime Minister (PM) Shehbaz Sharif made his fourth contact with International Monetary Fund (IMF) Managing Director (MD) Kristalina Georgieva in six days.

In a telephonic conversation, PM Shehbaz expressed confidence that understanding on International Monetary Fund programme will shape into a final decision by the lender within a couple of days.

The premier also expressed the resolve to achieve the goals for improving economic condition of the country in collaboration with the Bank, a handout released by the Prime Minister’s Office (PMO) said.

Speaking on this occasion, the Managing Director IMF acknowledged efforts of the Finance Minister and his team for completing the IMF programme in the wake of her recent meetings with Prime Minister Shehbaz Sharif in Paris.

“We want positive improvement in the economic situation of Pakistan,” the IMF MD told the prime minister while lauding his leadership qualities.

Pakistan’s ninth review by the IMF under the 2019 Extended Fund Facility (EFF) for the release of a $1.2bn funds is still pending with just 3 days remaining the programme’s expiry on June 30.

Pakistan has also revised its budget for the financial year starting on July 1, and hiked policy rates to 22% in its desperation to clinch the deal, key to unlocking other external financing for the cash-strapped nation.

‘90pc conditions met’

Earlier, it was reported that Pakistan has met 90 percent conditions for the staff-level agreement with IMF.

Sources said that Pakistan has also abolished the scheme to bring $0.1 million to the country annually and the interest rate has been increased by one percent. The basic interest rate has been hiked from 21 percent to 22 percent.

The memorandum of economic and financial policies which includes nine tables has been sent to IMF and the financial experts of the IMF will analyze the memorandum now, sources added.

The source further revealed that talks for the staff-level agreement will take place tonight and Finance Minister Ishaq Dar will finalize the staff-level agreement with the IMF.