Pakistan-IMF deal: Written assurance from friendly countries needed for loan revival

ISLAMABAD: The International Monetary Fund (IMF) has tabled another condition for the revival of $7 billion Extended Fund Facility (EFF), seeking ‘written assurance’ of financing from friendly countries to Pakistan by June 30, ARY News reported on Wednesday, citing sources.   

According to details, the lender has put forward a new condition before signing a staff-level agreement for the revival of $7 billion Extended Fund Facility (EFF), stalled for months.

Sources told ARY News that IMF has sought a written assurance of financing to Pakistan from friendly countries, including the Saudi Arabia, Qatar and the United Arab Emirates (UAE) by June 30.

Sources within finance ministry claimed that the written assurance must be provided by the executive directors of the respective friendly countries at the International Monetary Fund (IMF).

The government of Pakistan – the Prime Minister’s office and Ministry of Finance – has become active in obtaining the written assurance from the friendly countries, sources said, adding that the authorities expect to obtain the written assurance soon.

Meanwhile, sources claimed that Pakistan had also agreed with the IMF’s last condition not to take direct loans from commercial banks. Moreover, Pakistan and IMF officials have completed negotiations on the revised Memorandum of Economic and Financial Policies (MEFP).

The International Monetary Fund (IMF) had asked Pakistan to implement demands before reaching a staff-level agreement for the revival $7 billion Extended Fund Facility (EFF) stalled for months.

Pakistan has reportedly fulfilled all the pre-conditions of the IMF for the staff-level agreement.

‘IMF deal within a few days’

A day earlier, Prime Minister Shehbaz Sharif said the staff-level agreement with the International Monetary Fund (IMF) would be finalised within a few days as the government had accepted even the “toughest” conditions put by the global lender.

The prime minister Shehbaz Sharif, talking to the Council of Pakistan Newspaper Editors (CPNE), said that joint efforts were being made by the government’s economic team as well as other national institutions for the deal with the lender.

Shehbaz said that at the time of assuming office, he was unaware of the conditions that his predecessor, former prime minister and Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan, had agreed with the IMF. Shehbaz Sharif said that Imran Khan backed out of those conditions to undermine Pakistan in the world as well as among global institutions.

“This is why the IMF is making us accept those conditionalities and seeking their implementation. No doubt, these conditions have burdened the common man,” he commented.

‘Pakistan to seek US help’

Following the delay in the staff-level agreement with the International Monetary Fund (IMF), Pakistan has decided to seek US help for the revival of the stalled loan programme, it emerged.

Sources within the Finance Ministry familiar with the development said that the incumbent government has decided to seek Washington’s help as the majority of the demands of the fund have been completed. “There is no need for further delay in the staff-level agreement.”

They further say Finance Minister Ishaq Dar will talk with the US envoy this week. It has been leanrt that there are chances of a staff-level agreement between Pakistan and the IMF this week.