Tag: assurance

  • IMF asks for more effort from Pakistan, loan programme in jeopardy

    IMF asks for more effort from Pakistan, loan programme in jeopardy

    Despite assurances from friendly countries regarding external funds for Pakistan, the International Monetary Fund (IMF) remains unconvinced and is asking Islamabad to make additional efforts to unlock a loan programme.

    According to sources, Pakistan has been requested to present a repayment plan for a $3.7 billion loan to the IMF in June and to demonstrate stronger support from friendly nations to fulfill this obligation.

    However, the IMF has not yet accepted a proposal to exchange reserves worth between $11 to $12 billion, equivalent to two months’ revenues. The Ministry of Finance has stated that the government has imposed Rs170 billion in taxes through a mini-budget to secure a staff-level agreement with the IMF, which was initially scheduled for February 9th.

    It is noteworthy that the IMF has not included Pakistan in any agenda until May 17th. The budget-making process may also be affected if transactions with the IMF are not concluded, as funding will not be available from international financial institutions without a staff-level agreement.

    Last month, the staff-level agreement between Pakistan and the International Monetary Fund was postponed due to the lender’s new demand.

    Finance Secretary Hamid Yakoob’s meeting with the International Monetary Fund in the United States did not yield positive results as the lender requested the arrangement of $1 billion from commercial banks to unlock the loan program.

    The staff-level agreement, originally scheduled for February 9th, was delayed due to the IMF’s demands.

  • Pakistan’s nuclear and missile programmes will not be compromised for IMF deal, says Finance Minister

    Pakistan’s nuclear and missile programmes will not be compromised for IMF deal, says Finance Minister

    During a session of the Senate on Thursday, Pakistan’s Finance Minister Ishaq Dar stated unequivocally that there would be no compromise on the country’s nuclear and missile programs. The assurance came in response to questions posed by PPP Senator Raza Rabbani, who had raised concerns about the delay in Pakistan’s agreement with the International Monetary Fund (IMF). Rabbani had suggested that the delay might be due to pressure being exerted on Pakistan’s nuclear program.

    In response to Rabbani’s questions, Dar stated that the delay was not due to any action by the current government, but rather to the fact that the IMF had requested that certain friendly countries fulfill commitments they had made to support Pakistan. According to Geo, Dar promised that once the staff-level agreement and the Extended Fund Facility program were finalized, the details would be posted on the finance ministry’s website.

    Dar also expressed his belief that Pakistan’s nuclear program was a matter of national security and emphasized that no one had the right to tell Pakistan what range of missiles or nuclear weapons it could have. He argued that the country’s nuclear and missile programs were essential for deterrence and for guarding Pakistan’s national interests.

    The delay in the IMF agreement has been a cause for concern, as it is seen as critical to taming a balance-of-payments crisis. The agreement, which was approved by the IMF in 2019 and is worth $6.5 billion, includes $1.1 billion that would be released once the agreement is signed. Dar had previously blamed the delay on the previous government, which he said had failed to meet commitments and created a trust deficit. Despite the delay, Dar stated that Pakistan was “very close” to signing the agreement.

  • Another friendly country to confirm assurance this week: Miftah Ismail

    Another friendly country to confirm assurance this week: Miftah Ismail

    According to Pakistan’s Finance Minister Miftah Ismail, “one friendly country” has confirmed its commitment to assist Pakistan in filling the funding gap, while another nation would confirm its assurance in a day or two.

    An announcement will be made soon on this subject after confirmation.

    Earlier, the International Monetary Fund (IMF) said that Pakistan has completed the final prior action for the combined seventh and eighth reviews with the increase in the petroleum development levy (PDL).

    The IMF also stated that the board meeting is tentatively scheduled for late August once adequate financing assurances are confirmed.

    In order to prevent Pakistan from having a liquidity vacuum following the IMF loan, the international lender wants to make sure Pakistan will be able to get $4 billion in additional cash.

    The country has a $4 billion finance imbalance, according to Miftah, and the IMF wants our reserves to grow by $6 billion.

    Pakistan is in touch with friendly nations to cover the gap, and one of them has already reaffirmed its assurance. Within a day or two, the other nation will confirm as well.

    The assurances would be announced in advance of the IMF board meeting, which is slated to take place in the last week of August. According to reports, the IMF would announce the disbursement for Pakistan as soon as sufficient finance assurances are verified.

    The import bill has decreased to $4.92 billion, according to the minister. Due to this, there is now more cash coming in than going out. The market attitude has improved as a result of this.

    He believed that the Pakistani rupee had grown significantly versus the US dollar and would continue to do so.

    The Pakistani rupee made a significant recovery on Wednesday, recording its largest day-over-day gain in absolute terms against the US dollar to settle at Rs228.8, up Rs9.58 or 4.19 per cent in the inter-bank market. In the early hours of Thursday, trade, the rupee kept rising.

    On Thursday, stocks extended their gains, with analysts blaming the strong recovery of the rupee and soaring global equities for the optimistic trend.

    Read more: Dollar may drop near Rs180 after IMF tranche

    The benchmark KSE-100 index increased 356.50 points or 0.87 per cent to settle at 41,425.37 points, according to the Pakistan Stock Exchange (PSX).

    After being battered for weeks due to political and economic unrest, the local currency recovered by Rs9.59 on Wednesday, marking the highest one-day rise in decades.