Pakistan ‘hopeful’ of IMF deal as loan programme set to expire tomorrow

ISLAMABAD: The federal government was hopeful of reaching a staff-level agreement with International Monetary Fund (IMF) on financial support, with the loan programme set to expire on June 30, ARY News reported on Thursday.

According to officials of Ministry of Finance and Revenue, Pakistan, on its part, has settled all matters with the international lender, expressing optimism that an agreement would be reached with the IMF for the release of the much-needed $1.2bn tranche.

The officials claimed that Pakistan is likely to reach staff-level agreement with the Fund in next ‘one or two days’.

“The federal government has met also the conditions tabled by IMF for staff-level agreement,” the officials added.

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.

It is pertinent to mention here that 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.

IMF aims to ‘quickly’ reach agreement with Pakistan

In a statement issued on Tuesday, IMF’s mission chief Nathan Porter 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.