Finance Minister Muhammad Aurangzeb expressed optimism on Tuesday regarding the upcoming review of Pakistan’s $7 billion Extended Fund Facility (EFF) by the International Monetary Fund (IMF), scheduled for tomorrow.
The IMF confirmed that its board would convene on September 25 to discuss the EFF for Pakistan. This announcement followed speculation that the release of funds might be delayed due to pending debt rollover confirmations from China, Saudi Arabia, and the UAE.
Concerns also arose over the government’s inability to secure fresh financing to bridge the $2 billion external funding gap for the current fiscal year.
Aurangzeb, in an interview with Geo News, voiced confidence in the board’s approval of the 37-month programme, emphasizing the government’s commitment to structural reforms.
He highlighted that with KIBOR and policy rates declining, the government aimed to signal that it wasn’t in urgent need of borrowing. He noted that any domestic borrowing would occur on the government’s terms, referencing recent rejections of bids for Treasury Bills (T-Bills) and Pakistan Investment Bonds (PIBs).
“This confidence stems from the Fund programme, and we have successfully completed the nine-month Stand-by Arrangement (SBA),” Aurangzeb said.
The finance minister expressed gratitude to China for its consistent support and stressed the importance of advancing the reform agenda. This includes reforms in taxation, energy, state-owned enterprises, and privatization, which the government is committed to pursuing.
Pakistan and the IMF finalized a three-year, $7 billion aid agreement in July, aimed at strengthening the country’s macroeconomic stability and fostering conditions for inclusive and resilient growth.
Pakistan had also completed its prior $3 billion loan programme in April and, last month, earned a credit rating upgrade from Moody’s and Fitch.
