Next week, IMF delegation will travel to Pakistan for review discussions

According to media reports on Wednesday, the IMF will send a delegation to Pakistan the next week to negotiate the release of a USD 3 billion loan, which includes a USD 710 million second tranche, to help the cash-strapped nation stabilise its unstable economy.

 

As part of a USD 3 billion nine-month bailout programme, the Washington-based global lender released USD 1.2 billion to Pakistan in July to assist the government’s efforts to stabilise the nation’s faltering economy. It was simply a bridging loan, but it gave Pakistan, which was struggling with a severe balance of payments problem and declining foreign exchange reserves, a great deal of relief.

 

For the second loan tranche of USD 710 million, the first review talks will take place on November 2 and beyond. According to The Express Tribune newspaper, an agreement at the staff level would facilitate the loan’s acceptance by the International Monetary Fund (IMF) board in December.

 

‘The IMF team led by Nathan Porter will field a mission to Pakistan starting on November 2 on the first review under the current Stand-By Arrangement (SBA) of USD 3 billion,’ Esther Perez, the resident representative of the IMF, was reported as saying by the newspaper.

 

For the past few years, Pakistan’s economy has been in a free fall mode, which has put immense strain on the country’s impoverished population in the form of uncontrolled inflation.

 

The State Bank of Pakistan and the federal government are still optimistic that they would easily finish the evaluation after fulfilling the requirements set forth by the IMF in July.

 

The Ministry of Finance’s internal review reveals a significant discrepancy between the loans scheduled to be received and the actual disbursements for the current fiscal year, indicating that the external financing gap continues to be a challenging area for the government.

 

To get an update on all structural benchmarks, indicative criteria, and performance criteria agreed upon with the IMF for the end of September 2023, Pakistan’s finance secretary called an important meeting of all ministries, divisions, and departments on Thursday, according to Geo News.