No 'Plan B' if IMF programme fails to mature, Pasha tells NA committee

The ongoing $6.5bn IMF programme is going to expire on June 30

ISLAMABAD (Web Desk) - Pakistan will not have any Plan B if the International Monetary Fund (IMF) bailout package under the Extended Fund Facility (EFF) doesn't get through, Minister of State for Finance Dr Aisha Ghaus Pasha told the National Assembly Standing Committee on Finance on Thursday.

She said the the government was committed to reviving the IMF programme by completing the pending ninth review.

The state minister was replying to a query of MNA Ali Pervez Malik that if there is Plan B in case of failure to revive the IMF programme and that there was talk about a dollar amnesty scheme to improve dollar liquidity.

Pasha told the committee participants that the international financial institution didn't accept the external financing gap of $4.5 billion assessed by Pakistan, saying the lender was still sticking to its projection of a financing gap of $6bn for the ongoing financial year against Islamabad’s assessment of $4.5bn on which assurances extended to the IMF by multilateral as well as bilateral creditors.

She said the government had shared the budgetary framework for the next fiscal year to satisfy the IMF. "However, Pakistan has been waiting for the IMF’s response to share its recent steps to bridge the gap between interbank and open market rates on exchange rates, and assurances on external financing gaps."

The minister clarified that the sharing of budgetary numbers is not the part of ninth review as it will be part of the 10th review but Prime Minister Shehbaz Sharif has decided to share the numbers for the revival of the Fund programme.

The state minister said that there was a trust deficit, not because of the incumbent regime, but blamed the last PTI-led government for breaching the IMF agreement by doling out un-targeted fuel and electricity subsidies just before leaving the government in the last financial year.

She said that Saudi Arabia had granted assurances of $2 billion in additional deposits, while $1 billion have been committed by the United Arab Emirates (UAE).

A senior official of the State Bank of Pakistan informed the NA panel that the permission granted for credit cards from exchange companies to interbank rate would require $70 million to $100m on average on a monthly basis and recommended the FBR for raising taxes on transactions through credit cards in foreign exchange in the upcoming budget to compress demands for increased foreign exchange requirements.

The ongoing $6.5bn IMF programme is going to expire on June 30.