IMF outreach revives hopes for stalled loan

PM UPBEAT ON CLINCHING AGREEMENT WITH GLOBAL LENDER THIS MONTH

The International Monetary Fund (IMF) has said that it will be sending a delegation to Pakistan on January 31, raising the prospect of a revival of the bailout programme stalled in the past months.

The Washington-based global lender has agreed to send a mission at the request of Pakistani authorities.

The IMF team is scheduled to visit Islamabad from January 31 to February 9 to continue discussions under the ninth extended fund facility (EFF) review. The development comes a day after finance ministry officials held a meeting in Islamabad with a US treasury department delegation.

Local media reported that the meeting was part of efforts to convince the IMF to revive the stalled programme and release a $1.1-billion tranche that had been withheld.

Pending review

Pakistan entered the $6 billion IMF programme in 2019, which was raised to $7 billion this year. The country stands to get $1.18 billion after the programme’s ninth review, which is currently pending.

Prime Minister Shehbaz Sharif yesterday said that he is confident that the government would be able to reach an agreement with the IMF this month, which would help Pakistan “get out of these difficulties”. He expressed hope that the IMF loan revival would help unlock inflows from friendly countries and multilateral lenders.

The PM emphasized the adoption of austerity measures to

1.1b $ tranche of the bailout package is pending consideration 7 $ b is the revised quantum of the IMF bailout programme

tackle economic difficulties. He said the government had set its priorities keeping in view foreign exchange reserves, thus allowing for import of medicine and food as essential items.

Pakistan is seeking a crucial instalment of $1.1 billion from the IMF to avoid the possibility of a sovereign default.

The coalition government continues to face mounting pressure over its economic strategy and particularly the policies of finance minister Ishaq Dar. However, Dar insists the economic crises are “not the result of the current government’s eight months in power but the previous administration”.

The Pakistani rupee on Thursday fell 9.6 per cent against the dollar in the interbank market, the biggest one-day drop in over two decades, after the unofficial cap on the currency’s exchange rate was removed.