IMF official's assurance on agreement gives a shot in the arm
Business
IMF Director 'expresses confidence' in reaching agreement
ISLAMABAD (Dunya News) - The Finance Ministry on Wednesday once again sounded hoepful for inking the long-awaited staff-level agreement (SLA) with the Washington-based International Monetary Fund (IMF) as the latter "expressed its confidence" in signing it "soon".
Taking to Twitter, the Ministry of Finance wrote that the IMF Director Middle East and Central Asia Department Jihad Azour "expressed confidence" for the SLA to be inked "soon" at a meeting with the Pakistani delegation comprising Special Assistant to the PM on Finance Tariq Bajwa, Minister of State Dr Aisha Ghaus Pasha, Pakistani ambassador to the US Masood Ahmad Khan, Tariq Pasha, and State Bank of Pakistan governor Jameel Ahmad.
Finance Minister Ishaq Dar attended the meeting virtually via Zoom.
— Ministry of Finance (@FinMinistryPak) April 12, 2023
Pakistan and the IMF, earlier, could not reach an SLA 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 Sharif had claimed weeks ago.
In order to unlock the $1.1 billion next tranche of the $7billion loan, 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.
A few days ago, Mr Dar had confirmed the cancellation of his official visit to the US, saying the delegation would proceed without him, raising speculations on the long-standing SLA with the IMF. However, later he confirmed that he had called off the visit to the US for holding talks with the IMF on the directions of PM Shehbaz.
Mr Dar said the country did not delay any international payment despite financial hurdles adding that the staff-level agreement (SLA) with the IMF was about to be inked. “A friendly country has assured the IMF of paying $2billion while we are waiting for the other to assure payment of $1billion,” he added.
Earlier, it was reported that Pakistan had received $1 billion financing commitment from the United Arab Emirates (UAE). A written guarantee in this regard was too expected in the ongoing week after Mr Dar put special request to the UAE officials, sources said.
Mr Dar had claimed that the agreement was around the corner on different occasions whenever the country met conditions “recommended” by the IMF. Last month, the Industrial and Commercial Bank of China (ICBC) had also 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 which would help increase the level of foreign exchange reserves.
However, later, it turned out that the confirmation of financial support from Saudi Arabia and the United Arab Emirates (UAE) would lead to the signing of the SLA between Pakistan and the IMF, sources said.
