The International Monetary Fund (IMF) has not imposed any new restrictions on the agreement it reached with Pakistan at the staff level last week, according to Federal Minister for Planning and Development Ahsan Iqbal.
The Fund is reportedly “assessing Saudi Arabia’s commitment to financing Pakistan before it disburses fresh funds to the South Asian nation,” as Bloomberg reported earlier on Wednesday.
The minister, who met with IMF officials twice this week in New York and Washington, said that the fund “did not raise this topic in negotiations with us.”
At a news briefing at the Pakistan Embassy in Islamabad, Mr. Iqbal responded, “The Fund did not suggest any additional requirements in our talks.”
The Minister said, “The money will be released by August and the facility will be extended to June 2023 with an additional $1 billion added to the package.”
The Washington-based lender “wants to ensure that Saudi Arabia follows through with as much as $4bn in cash to Pakistan to ensure Islamabad does not have a liquidity shortfall after the IMF loan,” Bloomberg said.
The International Monetary Fund and Pakistan agreed last week at the staff level to finalise the seventh and eighth evaluations of Pakistan’s Extended Fund Facility (EFF). The next $1.2bn instalment of the program’s disbursements to Pakistan is contingent on approval by the IMF’s Executive Board. This would bring the total disbursements to around $4.2bn. It is anticipated that the board will hold a meeting in the month of August.
According to Bloomberg, Pakistan’s debt is too large for the IMF loan of $1.2 billion. It was noted in the study that “Pakistan’s rupee and bonds are plummeting as the funding troubles, coupled with fresh political uncertainty, roil the country.”
According to the estimate, Pakistan would need at least $41 billion over the next year to cover debt payments and increase foreign exchange reserves.
The minister of planning has stated that he proposed the establishment of a COVID-like fund for developing countries in his meeting with IMF officials at the United Nations.
Last week, a staff-level agreement was achieved between the IMF and Pakistan to finalise the seventh and eighth reviews of Pakistan’s Extended Fund Facility (EFF). Once the agreement is approved by the IMF’s Executive Board, Pakistan will receive the next $1.2bn instalment, bringing the total payments under the programme to over $4.2bn. There will be a board meeting in August.
According to Bloomberg, Pakistan would still default on its debts even with the $1.2 billion loan from the IMF. It was noted in the study that “Pakistan’s rupee and bonds are plummeting as the funding troubles, coupled with fresh political uncertainty, roil the country.”
Minister said he met with IMF officials in Washington and reaffirmed Pakistan’s commitment to the IMF programme, which the PTI administration has been breaking. The IMF and other lenders have lost faith as a result of this breach, he claimed. We guaranteed them there would be no further betrayals of trust. We informed them Pakistan is serious about doing business,” the minister stated.
When their board convenes to discuss the staff level agreement, we asked that they relay the message that we are ready to do whatever is necessary to get our economy back on track.
Mahnur is MS(development Studies)Student at NUST University, completed BS Hons in Eng Literature. Content Writer, Policy analyst, Climate Change specialist, Teacher, HR Recruiter.
