ISLAMABAD: Finance Minister Ishaq Dar said on Monday that Pakistan has “fulfilled all conditions” of the International Monetary Fund (IMF) and expressed hope that the fund would soon sign a staff-level agreement, paving the way for the release of the $1.1 billion tranche.
The two sides have been in intensive talks since February to reach an agreement on several conditions, including external financing from friendly countries, before signing the deal.
Speaking to JEE News today, Ishaq Dar said that both Saudi Arabia and the United Arab Emirates (UAE) have informed the IMF of their commitments to provide $3 billion to Pakistan.
Riyadh will provide $2 billion while Abu Dhabi has pledged $1 billion to Pakistan, Dar said, adding that the Washington-based lender has also been informed.
The finance minister said that all the terms of the staff-level agreement between Pakistan and the IMF have been fulfilled.
Ishaq Dar added, “Pakistan is hopeful that the IMF will soon sign the SLA and get it approved by its executive board.”
The country’s foreign exchange reserves have fallen to barely covering a month’s worth of imports after IMF funding stalled in November, while officials from the lender visited Islamabad for talks in February. Difficulties were encountered due to policy adjustments.
He formed part of the ninth review exercise on the $6.5 billion bailout package in 2019, which is critical for Pakistan to rehabilitate to avoid the risk of default on external payment obligations.
Pakistan had to complete measures demanded by the IMF, such as withdrawal of subsidies in its power, export and agriculture sectors, increase in energy and fuel prices, and permanent electricity surcharge, among other measures. except.
The measures include raising its key policy rate to a record high of 21 percent, a market-based exchange rate, external financing arrangements, and more than 170 billion rupees ($613 million) in new taxes.
The fiscal adjustment has already fueled Pakistan’s highest-ever inflation, which rose in March to more than 35 percent over the year.
The IMF will release another $1.4 billion tranche to Pakistan before the program ends in June.
Funding from the lender will also open up other bilateral and multilateral financing for the cash-strapped country.
Neighboring China has invested more than $2 billion in recent weeks and refinanced another $1.3 billion.
