Dar updates Chinese diplomat on IMF affairs

Meeting comes as Pakistan pays in Chinese Yuan for Russian crude oil

ISLAMABAD (Web Desk) – Finance Minister Ishaq Dar apprised Chinese Chargé d’ Affaires Pang Chunxue about the progress made in the ongoing talks with the International Monetary Fund (IMF), according to a press release issued by the Public Information Department.

He briefed the Chinese official, who met him in the federal capital on Monday, and also informed her about the positive response by the various sectors of economy to the next year’s budget presented by the incumbent government despite difficult economic circumstances.

The development comes as the talks between the two sides on the 9th review of the IMF programme has stalled since November last year, leaving very little room for its completion before June 30 – the date on which the current programme expires.

In a related development, Minister of State for Petroleum Musadik Malik told Reuters on Monday that Pakistan paid for its first government-to-government import of discounted Russian crude in Chinese currency, representing a significant shift in its US dollar-dominated export payments policy.

Read more: Pakistan's Russian crude shipment paid in Chinese currency: Musadik Malik

Discounted crude offers respite as Pakistan faces an acute balance of payments crisis, risking a default on its debt obligations. The foreign exchange reserves held by the central bank are scarcely enough to cover four weeks of controlled imports.

At the same time, Pakistan's purchase gives Moscow a new outlet to add to growing sales to India and China, as it redirects oil from Western markets because of the Ukraine conflict.

With the 9th review still pending, the possibility of next two – 10th and 11th reviews – in the coming days and weeks is near to impossible.

That’s why Dar, had told the post-budget press conference last week on Saturday in response to a question, that the government was working on a “Plan B” if the IMF did not release the pending loan.

Read more: Dar says budget growth-oriented, mentions Plan B if no progress made on IMF deal

He, however, avoided to explain or share any details, saying, “Plan-B is always there”. He stated that the features of the plan could not be talked about in public and again reiterated that Pakistan would not default.

But he was still hopeful that Pakistan would pass its next IMF 9th review, but that he "didn't think" it would clear reviews beyond that under the current programme.

Coming back to the Monday’s meeting between Dar and Chunxue, the finance minister Dar greeted the Chinese diplomat for joining back after a break and extended good wishes to her, the press release said.

He appreciated the deep-rooted historical bilateral relations between the two nations and much-admired the Chinese support to Pakistan on multiple fronts. He also highlighted the need to deepen bilateral relations further in economic, trade, and financial sectors.

Chunxue reciprocated the sentiments and acknowledged the friendly relations between Pakistan and China, as she assured the finance minister continuous support from Beijing to the people of Pakistan.