Tag: Friendly countries

  • IMF denies seeking $8 billion fresh financing from Pakistan in bailout talks

    IMF denies seeking $8 billion fresh financing from Pakistan in bailout talks

    The International Monetary Fund (IMF) has denied recent reports that it is seeking fresh financing from Pakistan, stating that Pakistan’s external financing requirements have remained unchanged throughout talks with the Fund.

    The clarification comes after a report by the Express Tribune suggested that the IMF had increased its demand for additional financing to $8 billion, up from an unmet condition of $6 billion, in order to ensure debt repayments for the May-December 2023 period.

    According to Reuters, IMF Resident Representative Esther Pérez Ruiz confirmed that the country’s external funding requirements had not changed, and that discussions were centered around a review to unlock $1.1 billion in financing as part of a $6.5 billion IMF package.

    Despite ongoing talks, a staff-level agreement on the review has been delayed since November, and the IMF has reiterated that commitments on external financing from friendly countries will be necessary before it can release bailout funds.

    Pakistan’s central bank reserves currently stand at $4.38 billion, equivalent to barely a month’s worth of imports.

  • 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 likely to receive economic assistance from friendly countries soon, says Minister Ahsan Iqbal

    Pakistan likely to receive economic assistance from friendly countries soon, says Minister Ahsan Iqbal

    On Tuesday, Minister for Planning and Development Ahsan Iqbal announced that Pakistan is likely to receive confirmation of economic assistance from friendly countries in the coming days. This confirmation is the last condition of the International Monetary Fund (IMF) and will be followed by a staff-level deal with the Fund.

    According to Iqbal, Pakistan has fulfilled nearly all conditions previously agreed upon with the IMF by the previous government. Currently, the Fund is requesting confirmation from the friendly countries providing assistance to Pakistan. Once received, the IMF deal will come on track.

    During the US-Pakistan Diaspora and Private Sector for Flood Recovery and Rehabilitation Conference, three Memoranda of Understanding (MoUs) were signed with a Pakistan-based US company and US-Pakistani diaspora entities, mobilizing $78 million. The conference was organized by the US Agency for International Development (USAID).

    When questioned about the IMF’s objection to the fuel subsidy announced by the government for the poor segment of society, Iqbal clarified that this was an internal adjustment within the fuel price and no new subsidy was being announced. He expressed hope that the IMF would have no objection to the government’s move.

    Iqbal urged the US-Pakistan Diaspora to support the government’s efforts in recovering and rehabilitating millions of flood-affected people. He appreciated the United States’ pledge of $200 million for flood relief efforts but emphasized that Pakistan needs much more for the complete rehabilitation of millions of people affected by floods.

    In his remarks, United States Ambassador Donald Blome highlighted the contributions of the US-Pakistani diaspora and private sector in building back better for flood-affected communities in Pakistan. He reaffirmed the US government’s commitment to supporting flood relief and recovery efforts, disaster resilience, and food security.

    The conference continued the momentum built at the previous conferences in Islamabad where USAID signed six MoUs mobilizing $75 million. The discussions held in those conferences led to additional contributions and investments to help populations and areas affected by floods. More than 200 participants attended the Building Back Better Conference, including members of the US-Pakistani diaspora, prominent local business leaders, US business representatives, and Pakistani officials. They discussed ways to help the flood-affected population and communities.

    Ambassador Blome emphasized the longstanding US-Pakistan partnership in advancing Pakistan’s economic growth and social and humanitarian causes. He highlighted the need to strengthen climate resilience through the US-Pakistan “Green Alliance” framework and expressed the United States’ commitment to helping the US-Pakistani diaspora and Pakistan-based private companies find opportunities to pursue energy transformation and foster economic growth and development outcomes.

  • Dar says assurance of funding from friendly countries is the final hurdle in securing IMF deal

    Dar says assurance of funding from friendly countries is the final hurdle in securing IMF deal

    On Thursday, Finance Minister Ishaq Dar announced that the assurance of funding from “friendly countries” was the final obstacle to securing an IMF deal that would provide critical support to Pakistan’s struggling economy and prevent an economic crisis.

    During a session of the country’s upper house of parliament, Dar revealed that several countries had previously made commitments to support Pakistan during IMF reviews, and the IMF was now requesting that these commitments be fulfilled.

    The delay in securing the deal, which involves a $1.1 billion bailout package from the IMF, has been ongoing since November due to issues surrounding fiscal policy adjustments. The package is part of a larger $6.5 billion bailout approved by the IMF in 2019, which is crucial for Pakistan to avoid defaulting on external payment obligations.

    The deal would also allow Pakistan to access other financing avenues to bolster its foreign exchange reserves, which currently only cover four weeks’ worth of imports.

    The IMF has asked Pakistan to secure assurance of up to $7 billion to cover this year’s balance of payments gap, while Dar believes that $5 billion would suffice.

    An IMF mission has been present in Islamabad since February to negotiate a set of policy measures for Pakistan’s struggling economy, ahead of the annual budget due in June.

    Prime Minister Shehbaz Sharif stated that all of the IMF’s conditions had been met, and expressed hope that a staff level agreement would be reached soon.