ISLAMABAD: It seems that Pakistan may not get the crucial tranche from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) anytime soon, as the country’s loan programme is not on the agenda of the lender’s Executive Board till May 17, local media reported.
Pakistan and the IMF have been discussing fiscal policy measures in the review since February, aiming to resume stalled funding of $1.1 billion due in November from a $6.5-billion programme agreed in 2019, Geo News reported. Pakistan is trying to unlock the crucial ninth review as other multilateral lenders have set the revival of the IMF programme as a precondition to unlock funding.
The IMF funding is vital for Pakistan to avert a default on its external payment obligations during a balance of payment crisis, in which foreign exchange reserves have shrunk to just four weeks of controlled imports, Geo News reported. According to sources, the global lender is not satisfied with the assurances given to it by Pakistan’s friendly countries.
Officials of the finance ministry, who spoke on the condition of anonymity, shared that Pakistan has fulfilled multiple conditions set by the lender for the revival of the loan facility. They added that the staff-level agreement on the ninth review was supposed to be signed by February 9.
They further said that the delay in the IMF programme is likely to affect the budget planning which is expected to be tabled in the second week of June, Geo News reported.
Last week, IMF mission chief in Pakistan Nathan Porter said the lender was working with Pakistan to conclude a ninth review of the bailout programme. As part of the conditions, Pakistan has given an assurance that its balance of payments gap this fiscal year, which ends in June, is fully funded.
Pakistan has announced pledges worth $3 billion in financing support from Saudi Arabia and UAE, but the funds are yet to come through. Longtime ally China has rolled over and refinanced its loans, Geo News reported.
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