IMF says having ‘productive’ talks with Pakistan as part of program review

By Staff Reporter

ISLAMABAD: The International Monetary Fund said it was having ‘productive’, ongoing discussions with Pakistan as part of a ninth program review of a $7 billion rescue package.

Pakistan’s ninth review staff-level talks with the IMF for the release of its next tranche has been delayed since September, though finance minister Ishaq Dar repeatedly said all targets for the IMF’s ninth review had been completed.

Later the minister said the Washington-based lender had asked Pakistan for more information to finalise the ninth review. Officials said Islamabad is behind on multiple performance criteria essential for the completion of the review, with the government seeking some waivers from the lender.

The IMF and Pakistan do not yet have a date for a formal staff-level talk on the ninth review, which intensified uncertainty over the timing of a much-awaited $1.18 billion tranche.

Pakistan secured a $6 billion bailout in 2019 under an Extended Fund Facility (EFF), that was topped up with another $1 billion earlier this year.

“Discussions to date in the context of the 9th review have been productive, and have enabled a revision to the macroeconomic outlook post floods as well as an in-depth evaluation of fiscal, monetary, exchange rate, and energy policies adopted since the completion of the combined seventh and eight reviews,” IMF Country Representative Esther Perez Ruiz said in a media release on Wednesday.

“The IMF looks forward to continue the dialogue over policies that adequately address the humanitarian and rehabilitation needs from the floods, while also preserving fiscal and external sustainability given available financing.”

With the IMF’s ninth review delayed, Pakistan needs external financing on an urgent basis. And the government approached Saudi Arabia for financial help.

The world’s top oil exporter, which has traditionally provided financial aid to Pakistan, is likely to pump $4.2 billion to shore up the cash-strapped country’s foreign currency reserves.

Reserves have dropped to $6.7 billion in December — hardly enough for a month of imports.