Pakistan-imf loan talks going well, take ‘bit of time’

ISLAMABAD: Pakistan’s loan talks with the International Monetary Fund (IMF) are progressing, according to the acting central bank chief, adding that such discussions can “take a bit of time”.

“We are confident we’ll get to the finish line,” Murtaza Syed, acting governor at State Bank of Pakistan, said in an interview with Bloomberg TV’S Rishaad Salamat yesterday.

The talks have been focused on issues including closing the country’s fiscal gap due to subsidies on fuel and electricity, and the formation of next year’s budget, Syed said.

“I would not want to put a date on it. I know that the budget negotiations can take a bit of time,” Syed said when asked when a deal could be done. “But the good news is that the gaps are being closed.”

The central bank raised its target interest rate to 13.75% on Monday, taking total increases from its pandemic-era lows to 675 basis points, as it struggles to tame Asia’s second-fastest inflation. Syed said in the interview that the hikes are aimed at cooling economic growth, keeping inflation expectations anchored and to moderate the current account deficit.

Consumer prices rose more than 13% in April, while the rupee plunged past 200 a dollar last week for the first time.

Pakistan’s foreign exchange reserves of Us$10.2bil (Rm44.8bil) cover less than two months of imports.

Talks are underway in Doha with the IMF for accessing the remaining Us$3bil (Rm13.18bil) from an existing loan programme.

Finance Minister Miftah Ismail pledged he would come back from the meetings with a deal.

“We are confident we’ll get to the finish line.”

Murtaza Syed