ISLAMABAD: As Pakistan restores the market-based exchange rate, the IMF announced on Thursday that its delegation would visit the cash-strapped country next week to pave the way for the release of the next tranche of its program. ‘assistance.
Pakistan joined a $6 billion International Monetary Fund (IMF) program under Imran Khan’s government in 2019, which was increased to $7 billion last year. The ninth review of the program is currently underway with talks between IMF officials and the government for the release of $1.18 billion.
According to official sources, the IMF team would be in Islamabad from January 31 to February 9 to meet with officials on the implementation of the conditions attached to the assistance program.
The ninth revision was on hold due to the government’s reluctance to raise electricity and gas tariffs and take other measures that would lead to another wave of inflation in the country in the election year.
However, as the IMF refused to back down on its demands, Prime Minister Shehbaz Sharif signaled that the government was finally ready to swallow the bitter pill of “stringent” IMF conditions to restart the loan.
IMF Resident Representative for Pakistan Esther Perez Ruiz said in a statement that the global lender will send its delegation. “At the request of the authorities, a mission of the Fund in person must go to Islamabad [from] From January 31 to February 9 to continue discussions under the ninth review of the EFF,” the statement said.
She said the mission would focus on policies to restore internal and external sustainability, including strengthening the fiscal position with high-quality and sustainable measures while supporting vulnerable people and those affected by floods; restore the viability of the electricity sector and reverse the continued accumulation of circular debt; and restoring the proper functioning of the foreign exchange market, allowing the exchange rate to fill the currency shortage.
“Stronger policy efforts and reforms are essential to reduce the current high uncertainty hanging over the outlook, build Pakistan’s resilience and secure financial support from official partners and markets which is vital for Pakistan’s sustainable development” , she said.
The IMF announcement came as US Ambassador to Pakistan Donald Blome called Prime Minister Sharif.
“The Prime Minister thanked the United States for its continued support of Pakistan’s flood reconstruction and rehabilitation efforts, including during the International Conference on Pakistan’s Resilience held recently in Geneva,” according to a statement. statement issued by the Prime Minister’s Office.
During the meeting, the Prime Minister reiterated that Pakistan values its longstanding ties with the United States.
He reaffirmed Pakistan’s determination to deepen its economic and commercial engagement with the United States.
Noting the recent surge in high-level bilateral exchanges, the Prime Minister stressed that a structured and expanded engagement between Pakistan and the United States is essential to advancing the two countries’ shared objectives in the bilateral and regional spheres.
Ambassador Blome said the United States will continue to support Pakistan’s recovery from the floods and the government’s economic development and reform efforts.
Earlier, Finance Minister Ishaq Dar on Wednesday asked a visiting US delegation to help convince the IMF to be soft on Pakistan in restoring the program. He also promised to honor all his international commitments.
Apparently, the IMF agreed to send a delegation after Pakistan allowed the rupee to depreciate massively by more than 24 rupees to adjust to the market rate. This was one of the main requirements of the lender.
Pakistan is struggling to mend its economic and political cracks amid a parochial political rivalry between former prime minister Imran Khan and the current government.
Pakistan joined a $6 billion International Monetary Fund (IMF) program under Imran Khan’s government in 2019, which was increased to $7 billion last year. The ninth review of the program is currently underway with talks between IMF officials and the government for the release of $1.18 billion.
According to official sources, the IMF team would be in Islamabad from January 31 to February 9 to meet with officials on the implementation of the conditions attached to the assistance program.
The ninth revision was on hold due to the government’s reluctance to raise electricity and gas tariffs and take other measures that would lead to another wave of inflation in the country in the election year.
However, as the IMF refused to back down on its demands, Prime Minister Shehbaz Sharif signaled that the government was finally ready to swallow the bitter pill of “stringent” IMF conditions to restart the loan.
IMF Resident Representative for Pakistan Esther Perez Ruiz said in a statement that the global lender will send its delegation. “At the request of the authorities, a mission of the Fund in person must go to Islamabad [from] From January 31 to February 9 to continue discussions under the ninth review of the EFF,” the statement said.
She said the mission would focus on policies to restore internal and external sustainability, including strengthening the fiscal position with high-quality and sustainable measures while supporting vulnerable people and those affected by floods; restore the viability of the electricity sector and reverse the continued accumulation of circular debt; and restoring the proper functioning of the foreign exchange market, allowing the exchange rate to fill the currency shortage.
“Stronger policy efforts and reforms are essential to reduce the current high uncertainty hanging over the outlook, build Pakistan’s resilience and secure financial support from official partners and markets which is vital for Pakistan’s sustainable development” , she said.
The IMF announcement came as US Ambassador to Pakistan Donald Blome called Prime Minister Sharif.
“The Prime Minister thanked the United States for its continued support of Pakistan’s flood reconstruction and rehabilitation efforts, including during the International Conference on Pakistan’s Resilience held recently in Geneva,” according to a statement. statement issued by the Prime Minister’s Office.
During the meeting, the Prime Minister reiterated that Pakistan values its longstanding ties with the United States.
He reaffirmed Pakistan’s determination to deepen its economic and commercial engagement with the United States.
Noting the recent surge in high-level bilateral exchanges, the Prime Minister stressed that a structured and expanded engagement between Pakistan and the United States is essential to advancing the two countries’ shared objectives in the bilateral and regional spheres.
Ambassador Blome said the United States will continue to support Pakistan’s recovery from the floods and the government’s economic development and reform efforts.
Earlier, Finance Minister Ishaq Dar on Wednesday asked a visiting US delegation to help convince the IMF to be soft on Pakistan in restoring the program. He also promised to honor all his international commitments.
Apparently, the IMF agreed to send a delegation after Pakistan allowed the rupee to depreciate massively by more than 24 rupees to adjust to the market rate. This was one of the main requirements of the lender.
Pakistan is struggling to mend its economic and political cracks amid a parochial political rivalry between former prime minister Imran Khan and the current government.
