Islamabad: Pakistan and the International Monetary Fund remain at a standoff as the two sides failed to reach a staff-level agreement to unlock USD 1.1 billion loan tranche after 10 days of “difficult” talks, The News International told. The development comes in the form of talks, which were concluded in Islamabad between the IMF and Pakistan from January 31 to February 9.
The IMF mission had reached Islamabad to hold talks with Pakistani officials. Pakistan’s Finance Minister Ishaq Dar was about to hold a press conference for the resumption of the programme. However, he has not made an official announcement regarding this matter.
In a statement released late Thursday, Pakistan’s Finance Secretary Hameed Sheikh said without disclosing details that “an agreement has already been reached with the IMF on necessary measures,” according to TNI’s report.
“Negotiations with the IMF have been completed. The IMF has handed over to the MEFP [Memorandum of Economic and Financial Policies] document [to Pakistan]Hamid Sheikh announced that the international creditor has asked Pakistani officials to conclude a staff-level agreement in the coming days and that “a loan release agreement will also be signed soon,” according to news reports.
“There has been an agreement between the IMF and Pakistan on all matters,” Sheikh said, noting that the IMF has also analyzed the sources of foreign inflows. He further said that the IMF mission headed by Nathan Porter will issue a detailed statement after approval from Washington.
During the policy-level talks, the IMF expressed its reservations on the projections made by Pakistan’s Finance Ministry on external financing flows from multilateral, bilateral creditors and commercial loans.
The IMF loan is critical for Pakistan’s economy as the State Bank of Pakistan’s (SBP) foreign exchange reserves have dwindled to $2.91 billion. Pakistan’s US$6 billion bailout package has been repeatedly stalled after the government led by former Prime Minister Imran Khan reneged on subsidy agreements and failed on its tax collection commitments outlined in the deal.
The government led by Pakistan PM Shehbaz Sharif restarted the program and received around USD 1.17 billion in August. Later, the program stalled again in September at the time of the ninth review because, according to news reports, Pakistani officials failed to meet their commitments with the IMF and introduced some fiscal measures in violation of agreed conditions.
Later, the Pakistan government agreed to the terms of the IMF as foreign exchange reserves continued to dwindle to dangerously low levels.