IMF eases rules for members to deal with crisis, but still no help to Pakistan

Under the General Resource Account of the Fund, the annual limit will be increased to 200% of the quota for a period of 12 months from the existing 145%, the financial agency said in an official statement.

The changes would provide member states – access to funds without triggering the so-called Extraordinary Access Framework which lays down difficult conditions. The measure comes after five development lenders were last month allowed to use their reserves to help poor countries, Reuters reported.

According to the statement, the fund’s staff will rejoin the executive board before the end of the 12-month period, so that the higher limit can be maintained for a longer period of time, should circumstances require it.

Pakistani government It is working hard to meet all its demands to unlock a $1.1 billion bailout package, however, officials revealed that the administration is nervous as it is finding it difficult to convince the global lender for funds . The country has raised policy interest rates, cut government spending, etc.

Earlier on March 4, Finance Minister Ishaq Dar had said that in the coming days the country is going to get a financial stimulus of $1.3 billion from the Industrial and Commercial Bank of China Limited (ICBC). The fund will be used to help boost Pakistan’s foreign exchange reserves as the country faces challenging economic conditions.

He pointed out that the State Bank of Pakistan (SBP) had $3.82 billion in foreign exchange reserves, which when added to the amount held by commercial banks, totaled around $9.26 billion.

The financial body has also asked Pakistan To assure that the balance of payments deficit is fully financed for the fiscal year ending in June to unlock the next tranche of IMF funding.

(with inputs from Bloomberg)