ISLAMABAD: Pakistan has approached the US to help it get “moderate treatment” from the International Monetary Fund (IMF) due to the fund’s demand for assurances on external finances. There is a delay in signing the Staffing Level Agreement (SLA).
According to a report in JEE News, the IMF has asked Pakistan to seek confirmation of external financing requirements of $6-7 billion from Saudi Arabia, United Arab Emirates (UAE), Qatar and multilateral lenders. So that this gap can be filled by the end of June 2023.
After failing to convince the lender, Islamabad was left with no choice but to seek help from Washington and its Western allies to get “soft treatment” from the IMF to move towards a staff-level agreement. can be done
The report said that Finance Minister Ishaq Dar contacted the US diplomatic corps in Islamabad and requested help to end the deadlock with the help of the US Treasury Department.
“Without Uncle Sam’s blessings, things cannot move in the desired direction, yet the Pakistani authorities claim that they have taken all the precautionary measures possible for them under the advice of the IMF. Now The IMF is asking friendly countries and multilateral lenders to get 200 percent assurances to cover the $6-7 billion financing gap on the external account by the end of June 2023,” sources confirmed to the publication. of
An official familiar with ongoing talks with the IMF revealed that the external financing gap has now narrowed from $7 billion to $6 billion due to the latest talks, but the IMF made it clear that Islamabad is a friend. Assurances will have to be obtained from countries. Multilateral lenders to sign an SLA.
“The IMF understands that the ball is in Pakistan’s court, but top officials in Islamabad say that once the IMF gives its approval, the external financing gap will be bridged,” the official added.
It remains to be seen how the IMF and the Pakistani side will proceed, as both sides blame each other for the delay in signing the much-awaited SLA.
An official said the fund believes that without full assurance of external financing, the ‘sustainability’ of the debt facility cannot be guaranteed.
A senior government official said late last night that the IMF held a final meeting with State Bank of Pakistan (SBP) officials on Monday, and now they hope to sign the agreement in the next few days. will
According to the official, the IMF also demanded a permanent end to power sector subsidies, as fund staff objected that the government had only made commitments till the end of the next financial year 2023-24.
However, the IMF wanted a commitment to end electricity subsidies on a permanent basis. Therefore, they asked for a change in the wording of the Memorandum of Economic and Financial Policies (MEFP) in the last meeting held last week.
