The IMF’s board is expected to take up reviews on Pakistan’s performance on August 24, 2022, in its meeting at Washington D.C. The board review would pave the way for release of the much-awaited $1.17 billion loan tranches that had been on hold since earlier this year.
By Staff Reporter
ISLAMABAD: Army chief General Qamar Javed Bajwa has reached out to the US for an early disbursal of the $1.2 billion loan from the IMF’s bailout programme as the cash-strapped country grapples with dwindling foreign exchange reserves inching towards foreign debt obligations.
General Bajwa called US Deputy Secretary of State Wendy Sherman earlier this week and reached out to the White House and the US Treasury Department to push the international lender to expedite the early release of the loan tranches from now $7 billion Extended Fund Facility.
Bajwa’s initiative came after meetings between senior civilian Pakistani and American officials failed to make progress on the negotiations for an early disbursement of IMF funds.
The lack of progress in those meetings spurred General Bajwa to get Washington’s attention when other emissaries could not deliver.
Three years ago, the Pakistan government under Prime Minister Imran Khan had inked a 39-month $6 billion programme with the IMF. The present coalition government sought an additional one billion dollar and a year’s extension in the facility, to which the IMF agreed.
Higher prices of energy imports have put the country on the brink of a major balance of payment crisis. Pakistan’s foreign exchange reserves continue to plummet sharply due to external debt and other payments. The country’s foreign exchange has fallen below $9 billion as on July 22, while the current account deficit widened to touch $2.3 billion for the month of June.
Foreign Office spokesman Asim Iftikhar confirmed that General Bajwa had reached out to the US authorities. “Well, I understand conversation has taken place, but at this stage, I am not in direct knowledge of the content of this discussion.”
An official of the US State Department said US officials talk to Pakistani officials regularly on a range of issues.
“As standard practice, we don’t comment on the specifics of private diplomatic conversations,” media outlets quoted unnamed State Department spokesman as saying.
Sources said the IMF’s board is expected to take up reviews on Pakistan’s performance on August 24, 2022, in its meeting at Washington D.C. The board review would pave the way for release of the much-awaited $1.17 billion loan tranches that had been on hold since earlier this year.
The IMF has given Pakistan several actions plan, including an increase in petroleum development levy (PDL) by Rs10 per liter on petrol and Rs5 per liter on diesel from August 1, 2022. There are some structural benchmarks (SBs) as well including committing not to grant further tax amnesties and tax exemptions.
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