Long-awaited IMF staff-level agreement 'around the corner'
'Pakistan manages to meet conditions to avail loan'
ISLAMABAD (Dunya News) – The International Monetary Fund (IMF) on Monday hinted at approving the weeks-long and debated staff-level agreement (SLA) between Pakistan and the global lender.
Sources said that the SLA could be inked this week as the IMF had expressed confidence over Pakistan’s attempts to meet the conditions imposed by the lender before unlocking the $1.1 billion tranche of the $7billion under the Extended Fund Facility. “The country’s forex reserves had improved after China rolled over a $1.3billion loan to Pakistan, thus helping the country fulfil the last pre-agreement condition imposed by the IMF”, sources added.
Pakistan is now looking towards Saudi Arabia and the World Bank for more assistance to revive the much-need IMF loan agreement. On the other hand, the Industrial and Commercial Bank of China (ICBC) had approved a rollover of $1.3 billion loan for cash-strapped Pakistan and the country was expecting to receive another installment of $300 million from Chinese commercial banks in the coming days which would help increase the level of foreign exchange reserves.
Earlier, the lender’s resident representative said that Pakistan would be required to give an assurance that its balance of payments deficit is fully financed for the remaining period of an IMF programme,
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Earlier, Pakistan and the IMF could not reach a staff-level agreement as talks between the government and global lender ended.
In the talks, actions and advance measures were agreed with the IMF mission asking for more time to strike a staff-level agreement after approval from Washington. “There will be a staff-level agreement which is expected in the next few days”, PM Shehbaz had claimed weeks ago.
In order to unlock the next tranche, the lender required Pakistan to increase levies on petrol, diesel, and gas; decrease circular debt and reform the power sector; collect up to $5 billion in funds from friendly countries; introduce a mini-budget to increase taxes; make public departments profitable; ensure compliance on privatisation scheme; and continue market-based exchange rate policy.
It merits mention that Finance Minister Ishaq Dar had claimed that Pakistan’s negotiations with the IMF were about to conclude and that SLA with the fund was expected this week.