By Staff Reporter
ISLAMABAD: The International Monetary Fund it is looking forward to obtaining the necessary financing assurances as soon as possible from Pakistan to conclude the long-awaited ninth review of a $7 billion loan programme.
The Fund’s Friday statement comes after Pakistan secured $3 billion in fresh inflow from Saudi Arabia and the UAE.
Nathan Porter, IMF mission chief to Pakistan said the fund “welcome the recent announcement of important financial support to Pakistan from key bilateral partners”.
“During the meetings between the Pakistani delegation and IMF staff and management, there was agreement on the need to maintain strong policies and secure sufficient financing to support the authorities’ implementation efforts,” Porter said in a statement.
“The IMF is supporting these efforts and looks forward to obtaining the necessary financing assurances as soon as possible to pave the way for the successful completion of the 9thEFF review.”
Porter’s statement did not specify the additional financing amount, but indicated that Pakistan may be a few steps away from a staff-level agreement as the country is required to secure fresh foreign exchange inflows.
Pakistan is required to give an assurance that its balance of payments deficit is fully financed for the fiscal year ending in June to unlock the next tranche of IMF funding.
The country has less than a month’s worth of foreign exchange reserves and is awaiting a bailout package of $1.1 billion from the IMF that has been delayed since November over issues related to fiscal policy adjustments.
Before the new bilateral support, reports suggested that at least $5 billion of inflow was required to be arranged — even after the narrower current account deficit.
Apparently, China’s rollover of $2 billion, and refinancing of another $2 billion — which included $1.3 billion from the Industrial and Commercial Bank of China (ICBC) and $700 million from China Development Bank — is not categorised as a new inflow.
Earlier this week the government announced financial support from the UAE, days after Minister of State for Finance Aisha Ghaus Pasha also said Saudi Arabia had assured the IMF it will provide a $2 billion loan to the South Asian country.
Pakistan’s government repeatedly reiterated it has completed all requirements to receive the critical bailout money from the fund.
Prime Minister Shehbaz Sharif said on Saturday the IMF had “no excuses now” to delay the $1.1 billion tranche since his administration had fulfilled all the conditions laid forth by the lender.
“The IMF has no excuses now since we have fulfilled all the conditions which were required for the approval of loan,” the prime minister said during a ceremony in Lahore. “However, we have to decide whether we want to continue living off of loans or become self-reliant.”
Sharif said Pakistan was not created to “run on debts and act like a beggar” since its previous generations had sacrificed a great deal for the country.
He noted the government was doing its best to revive the IMF loan facility which was important for the country to unlock funds from other multilateral and bilateral donors.
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