Tag: IMF

  • IMF board approves disbursement of $1.17 billion in bailout funds

    IMF board approves disbursement of $1.17 billion in bailout funds

    The seventh and eighth reviews of Pakistan’s bailout programme were approved by the International Monetary Fund (IMF) board on Monday, releasing $1.17 billion to the cash-strapped nation.

    Pakistan is now set to get a $1.17 billion loan tranche from the international lender within the next six days.

    “Alhamdolillah, the IMF board has approved the revival of our EFF programme. We should now be getting the seventh and eighth tranche of $1.17 billion,” said Finance Minister Miftah Ismail in a tweet announcing the news.

    Additionally, the Finance Minister praised the Prime Minister, Shehbaz Sharif, “for taking so many tough decisions and saving Pakistan from default.”

    The previous payment was made to Pakistan in February, and the subsequent tranche was scheduled to be released following a review in March.

    However, the PTI government drastically reduced petroleum prices by providing substantial subsidies to the country, which caused the program’s fiscal objectives to be missed.

  • ‘Yeh ab tai hogaya hai Imran Khan Pakistan aur 22 crore logo se zyada eham hain’: Twitter reacts to leaked audio

    ‘Yeh ab tai hogaya hai Imran Khan Pakistan aur 22 crore logo se zyada eham hain’: Twitter reacts to leaked audio

    In a leaked audio, former Finance Minister Shaukat Tarin allegedly asked Punjab Finance Minister Mohsin Leghari and Khyber Pakhtunkhwa Finance Minister Taimur Jhagra to write letters withdrawing from the International Monetary Fund’s (IMF) deal.

    Moments after the leaked audio surfaced on Twitter, both finance ministers and Tarin were under fire for their comments and how their conversations were an attempt by the Pakistan Tehreek-e-Insaf (PTI) to sabotage the IMF deal.

    Here are a few reactions.

    Meanwhile, PTI leader Asad Umar and Taimur Jhagra held a press conference following the audio leak between former federal minister Shaukat Tarin and the finance ministers of Punjab and KP.

    Umar said that Tarin, as a former finance minister, had every right to “give advice” to Jhagra and Leghari.

    “There is nothing wrong in Tarin speaking to Jhagra and Leghari on the phone and giving advice,” said Asad Umar.

  • Asad Umar defends Tarin’s alleged audio leak, Miftah asks Tarin to quit politics

    Pakistan Tehreek-e-Insaf (PTI) Secretary General Asad Umar along with Khyber Pakhtunkhwa (KP) Finance Minister Taimur Jhagra held a press conference following the alleged audio leak between former federal minister Shaukat Tarin and provincial finance ministers.

    Earlier in the day, an audio was leaked in which Tarin allegedly asked Punjab Finance Minister Mohsin Leghari and KP Finance Minister Taimur Jhagra to write letters withdrawing from the International Monetary Fund’s (IMF) deal.

    Umar said Tarin had asked both provincial finance ministers to request the federal government to renegotiate the IMF agreement due to the recent floods and the devastation caused both in KP and Punjab.

    “Can anyone say this isn’t good advice?”

    Umar accused the Pakistan Democratic Movement (PDM) of acting against the state’s interest and international commitments by voting and speaking out against legislation related to the Financial Action Task Force (FATF) and IMF agreement during PTI’s tenure.

    He said that Tarin, as a former finance minister, had every right to “give advice” to Jhagra and Leghari. “There is nothing wrong in Tarin speaking to Jhagra and Leghari on the phone and giving advice.”

    “If Jhagra felt that there was something wrong in it, then he would not have brought himself before the nation,” he added.

    Taking a jibe at the government, Umar posed a question: “Tell me if you are asking money from foreign governments, then why can’t you ask the IMF to give us space this year to use our money for flood-related expenses?”

    ‘Bring Khan to power but not at the cost of Pakistan’: Miftah Ismail

    Finance Minister Miftah Ismail said that Shaukat Tarin should leave politics and “Asad Umar and Taimur Jhagra should be ashamed of themselves”.

    “Imran Khan should ask the nation for forgiveness. Taimur Jhagra should resign and Shaukat Tarin should quit politics. Is this why you do politics?”

    He termed the PTI’s move the “most shameful thing”, saying that the real faces of PTI leaders have now been exposed.

    Referring to the IMF Executive Board meeting, which is set for today (August 29), Miftah said that by the will of God, the country will hear good news tonight after the IMF approves the pending tranche.

    Miftah Ismail also asked PTI supporters to question party Chairman Khan about whether the letter Jhagra wrote was in the state’s interest. “Do support Imran but tell him he is not bigger than Pakistan. Bring him to power but not at the cost of Pakistan.”

    “When they are writing letters against Pakistan’s interest, it is your responsibility to say no. Consider Pakistan’s interest to be sacred. If Pakistan’s interest is not sacred to a person, he is not fit to govern the country.”

  • Leaked audio: PTI’s Shaukat Tarin allegedly advising finance ministers in Punjab, KP to sabotage IMF deal

    Leaked audio: PTI’s Shaukat Tarin allegedly advising finance ministers in Punjab, KP to sabotage IMF deal

    In a leaked audio, former Finance Minister Shaukat Tarin allegedly asked Punjab Finance Minister Mohsin Leghari and Khyber Pakhtunkhwa Finance Minister Taimur Jhagra to write letters withdrawing from the International Monetary Fund’s (IMF) deal.

    ‘You need to say now that we will not be able to honour our commitment’: Shaukat Tarin

    In one leaked audio, Tarin can be heard asking Leghari to tell the IMF that the commitment Punjab made was pre-floods and now the province “cannot honour it” due to massive losses caused by the floods.

    Tarin told Leghari to draft a letter and send it to him for review so it could be sent to the federal government and later on to the IMF representative in Pakistan.

    “You have signed a Rs750 billion [surplus] commitment with the IMF. You now need to tell them that the commitment you made was before the floods, and now [Punjab] has to spend a lot of funds for [the] floods [rehabilitation].”

    “You need to say now that ‘we will not be able to honour our commitment’,” Tarin said.

    The former FM further told Leghari that this is all he [Imran Khan] wants – for pressure to increase on the incumbent government.

    Leghari questioned if this move will affect the state and will Pakistan as a state suffer if the Punjab government does what is being asked to do so?

    “Well, frankly isn’t the state already suffering because of the way they are treating your chairman [Imran Khan] and everybody else? IMF will definitely ask them: where will you get the money from now?” Tarin responded.

    Tarin further said that the party could not bear being mistreated. “We cannot be blackmailed,” Tarin said.

    “This is what was decided yesterday, however, whether we will be releasing this to IMF or not we will ask the chairman,” revealed the former FM.

    ‘By the way, this is a blackmailing tactic’: Taimur Jhagra

    In another leaked audio conversation between Tarin and Jhagra, Tarin asked Jhagra if he had written the letter.

    “I am on the way. I have the previous letter. I will send the letter to you after drafting it,” replied Jhagra.

    Read more: Jhagra responds after Miftah accuses KP govt of jeopardising IMF deal

    “First point [of the letter] would be that we need huge financial aid for restoration of infrastructure and rehabilitation of flood affectees,” Tarin tells the KP finance minister.

    “By the way, this is a blackmailing tactic,” he admitted.

    PTI’s finance minister in KP, Jhagra further said that he knows the number two guy at IMF and he can send the letter to him. He also revealed that he had been in contact with the IMF person and that he had been getting information from him.

    Read more: IMF Executive Board meeting to discuss revival of loan plan today

    It is pertinent to mention here that the IMF executive board will meet today (August 29), to discuss the bailout plan for Pakistan.

    The 8th and 9th tranches, totaling over $1.2 billion, are anticipated to be disbursed with board approval.

  • IMF Executive Board meeting to discuss revival of loan plan today

    IMF Executive Board meeting to discuss revival of loan plan today

    The International Monetary Fund (IMF) executive board will meet on Monday (today) to discuss the bailout plan for Pakistan.

    The 8th and 9th tranches, totaling over $1.2 billion, are anticipated to be disbursed with board approval.

    According to Geo, Pakistan also requested that the Extended Fund Facility (EFF) be increased from $6 billion to $7 billion and that the term be extended from September 2022 to June 2023.

    If the contract is approved by the board, the IMF will give Pakistan an initial payment of roughly $1.2 billion and could give up to $4 billion during the remaining months of the current fiscal year, which started on July 1.

    The board gave its approval for the transfer of $1.386 billion to Pakistan under the RFI in April 2020 to help with the economic effects of the Covid-19 shock.

    Additionally, according to The Wall Street Journal, Pakistan has secured at least $37 billion in foreign loans and investments in recent weeks, saving it from a financial catastrophe similar to that of Sri Lanka.

    The restart of the programme will greatly benefit the government led by Prime Minister Shehbaz Sharif as it will assist prevent what would be the second default in Asia this year after Sri Lanka.

    Bloomberg estimates that Pakistan would have to pay at least $3 billion in debt payment during the first half of the fiscal year 2023.

    The State Bank of Pakistan anticipates that foreign exchange reserves would increase to around $16 billion this fiscal year from $7.8 billion, thanks to the IMF loan opening the door for additional funding.

  • Jhagra responds after Miftah accuses KP govt of jeopardising IMF deal

    Jhagra responds after Miftah accuses KP govt of jeopardising IMF deal

    After Finance Minister Miftah Ismail accused the KP government of plotting to derail the IMF deal in a late-night press conference, KP Finance Minister Taimur Khan Jhagra stated that the province is currently dealing with a flood scenario that takes precedence over everything else.

    In a previous letter to Miftah, Jhagra connected the payment of the Rs100 billion in alleged liabilities with the clearance of the provincial cash surplus for this fiscal year, which is a requirement of Pakistan’s agreement with the International Monetary Fund (IMF).

    This occurs just three days prior to the revival of IMF’s multibillion dollar credit programme. The K-P government has already agreed through a memorandum of understanding (MoU) to achieve the Rs117 billion cash surplus that is required by the IMF arrangement. Ismail is a co-signatory of the Letter of Intent (LoI) that was recently sent to the IMF in order to revive the programme.

    “Please note that in these conditions [floods], and without the resolution of the issues highlighted previously, for the province of Khyber Pakhtunkhwa to actually leave a surplus will be next to impossible,” Jhagra wrote in the communique sent to Miftah on Friday.

    Miftah Ismail’s call, according to Jhagra, was “interesting,” and the two will now meet on Monday to resolve their issues. However, the provincial finance minister stated it was “sad” that in Pakistan, one needed to “shout to be heard.”

    Jhagra confirmed in a series of tweets that he had actually addressed a letter to the federal finance minister and not the IMF. The provincial minister sent a letter that included images as well.

    Jhagra went on to say that despite raising the same issues with Miftah at their meeting on July 5, they decided to return the IMF MoU to Islamabad within 24 hours with the approval of the chief minister of KP.

    Jhagra added that the KP administration would never back down from advocating for a strong federation or from bringing up its concerns at the centre.

    At a late-night press conference, Miftah called the letter “deplorable.” He labelled the letter as a “conspiracy to derail the IMF programme and sink the rupee.”

    He questioned whether PTI Chairman Imran Khan, who was seeking to obliterate Pakistan and its economy out of a desire for power, had any set parameters.

  • Pakistan receives Letter of Intent from IMF, moving closer to $1.17 billion tranche

    Pakistan receives Letter of Intent from IMF, moving closer to $1.17 billion tranche

    The International Monetary Fund (IMF) has sent Pakistan the Letter of Intent (LoI), bringing the disbursement of the $1.17 tranche for the combined seventh and eighth review closer.

    Pakistan will approve the Lol and return it to the IMF. The Extended Fund Facility will now be revived right after IMF board’s approval.

    The IMF team and the Pakistani government came to a staff-level agreement (SLA) in July for the conclusion of the combined seventh and eighth tranche.

    The international lender estimates that after the Executive Board approves it, around $1,177 million will become accessible, bringing the program’s total payouts to almost $4.2 billion.

    But according to a report from last month, before the multilateral lender provides Pakistan with new funding, it was also looking to determine the level of commitment from other sources.

    The Washington-based lender wants to make sure that Pakistan won’t experience a funding shortfall following the IMF loan.

    For Pakistan, which is desperately seeking dollar inflows in the face of declining foreign exchange reserves, the IMF support is essential in addition to other forms of finance.

  • IMF to send Letter of Intent soon to release $1.17 billion tranche

    IMF to send Letter of Intent soon to release $1.17 billion tranche

    The International Monetary Fund’s (IMF) agreement with Pakistan to release two tranches totaling $1.17 billion as part of a loan facility that was stalled is nearing completion, as the Letter of Intent (LoI) from the fund may arrive in a few days.

    Pakistan is likely to receive the LoI, which the governor of the State Bank of Pakistan (SBP) and the Finance Minister, Miftah Ismail, will jointly sign, according to The News.

    The IMF mission leader had to rush to Australia for a personal engagement, according to senior officials at the Finance Ministry, thus the Fund was likely to submit the LoI “anytime soon.”

    The IMF board would also discuss adding $1 billion to a $6 billion programme agreed upon in 2019 at its meeting scheduled for August 24.

    The government may impose higher taxes on cigarettes, tobacco leaves, fertiliser, and other items in order to appease the IMF.

    Additional taxes are being considered for a variety of sectors. Through a Presidential Ordinance, tax rates on cigarettes and the processing of tobacco leaf might be increased.

  • Pakistan to overcome $4 billion external financing gap soon: SBP

    Pakistan to overcome $4 billion external financing gap soon: SBP

    In the midst of intense pressure on foreign currency reserves, Pakistan will soon close its $4 billion shortfall in external finance with the assistance of friendly nations under IMF conditions, according to Acting Governor of the State Bank of Pakistan (SBP) Dr Murtaza Syed.

    He also acknowledged that inflation will continue to be higher for the ensuing 11 to 12 months, which is why the central bank was aiming for an average inflation target of 18 to 20 per cent for the current fiscal year 2022–2023

    According to The News, acting SBP Governor Dr. Murtaza Syed stated that Pakistan has already met its gross external financing requirements of $34 to $35 billion.

    However, Islamabad is also attempting to secure confirmation of $4 billion in inflows from friendly nations like Saudi Arabia, the UAE, and Qatar. According to him, these extra dollar inflows will be used to boost foreign currency reserves and build a safety net in case of a crisis-like circumstance.

    He resisted providing a specific timeline but assured that the $4 billion finance deficit will be closed quickly. He argued that urgent attempts were being made by the government and IMF high-ups to secure confirmation from their respective nations.

    Denying that the scenario was similar to Sri Lanka, he praised Bangladesh and claimed that nation performed properly, chose to return to the IMF, and also increased utility costs while maintaining enough levels of foreign exchange reserves.

    Speaking of increasing inflation, he believed that supply interruptions abroad had set the way for a global super cycle of commodities, leaving Pakistan with no choice but to concentrate on agriculture productivity in order to secure food security.

    According to Murtaza Syed, people would have to deal with this challenging moment because there is no immediate magic wand to manage increased inflation. He said that while it is a challenging time, there is no alternative way to prevent the country from entering a more challenging situation if nothing was done.

    According to the official, the SBP has loosened the cash margin requirements for opening L/Cs for imports and offers incentives to individuals who do so. According to him, the IMF opposed trade restrictions and took action to prevent the depletion of foreign exchange reserves.

    The current pressure on foreign reserves is now anticipated to end within the next two months. He also promoted energy saving as a way to ease the burden of high import costs.

    The senior official believed that as long as the economy’s structural issues persisted, Pakistan will continue to see boom and bust cycles. He gave a recent example in which the nation’s GDP increased by 6 per cent, indicating that the overheating of the economy led to imbalances known as the budget deficit and current account deficit. Although a recession is not imminent, he continued, the economy must be managed carefully.

  • Army chief reaches out to Saudi, UAE authorities to discuss IMF programme

    Army chief reaches out to Saudi, UAE authorities to discuss IMF programme

    Chief of Army Staff (COAS) General Qamar Javed Bajwa has spoken with the rulers of two Gulf countries — the Kingdom of Saudi Arabia (KSA), and the United Arab Emirates (UAE) — to discuss the International Monetary Fund (IMF) programme.

    According to media reports, the extended fund facility worth $1.2 billion with the IMF was discussed with the Gulf countries, including the upcoming executive board meeting of the IMF, which is expected to ratify the loan programmme.

    It is pertinent to mention that the loan programme reportedly came under discussion and a positive development is expected for Pakistan soon.

    The development has taken place a week after the COAS was reported to have reached out to US Deputy Secretary of State Wendy Sherman over resuming the programme with IMF. He appealed to the US to help Pakistan secure an early dispersal of $1.2 billion in funds.