Tag: loan approval

  • Uncertainty surrounds Pakistan’s $7 billion IMF bailout as approval date still not confirmed

    Uncertainty surrounds Pakistan’s $7 billion IMF bailout as approval date still not confirmed

    Pakistan’s much-anticipated $7 billion bailout package has not yet been scheduled for review by the International Monetary Fund (IMF) executive board, with the agenda extending only until August 30, according to the IMF’s recently released calendar.

    In July, Pakistani authorities and the IMF reached a staff-level agreement, potentially paving the way for a 37-month Extended Fund Facility (EFF) valued at SDR 5,320 million (approximately $7 billion).

    However, this agreement hinges on the approval of the IMF Executive Board, which is contingent upon Pakistan securing necessary financing assurances from its development and bilateral partners.

    The proposed programme is designed to build on the hard-won macroeconomic stability achieved in the past year. It aims to strengthen public finances, reduce inflation, rebuild external reserves, and eliminate economic distortions to foster private sector-led growth.

    Despite five weeks having passed since the staff-level agreement, Pakistan has yet to bridge an external financing gap of up to $5 billion.

    This delay has prevented the country from signing the Letter of Intent (LoI) required to formally request the IMF executive board’s approval of the $7 billion package under the EFF programme.

    The LoI is a critical step in requesting the IMF’s endorsement of the 37-month, $7 billion EFF programme. Without this approval, Pakistan cannot proceed with the much-needed financial support.

  • IMF wants Pakistan to implement property and agriculture tax

    IMF wants Pakistan to implement property and agriculture tax

    The International Monetary Fund (IMF) has recently granted Pakistan a $3 billion loan, subject to certain conditions that require a second review.

    According to reports, the Washington-based institution has asked the Pakistani government to devise a plan for implementing taxes on the real estate and agricultural sectors, with the aim of bolstering the country’s revenue generation.

    The IMF perceives a potential for Pakistan to enhance its revenue through taxation of these two sectors.

    Should the plan devised by the Federal Bureau of Revenue (FBR) gain approval from the IMF, it will result in the release of a mini-budget. However, the decision to impose taxes on the property and agriculture sectors ultimately rests with the new government.

    Additionally, sources indicate that assistance will be sought from the World Bank to facilitate the taxation of these sectors.

    It is worth noting that Pakistan recently received the initial disbursement of $1.2 billion from the IMF.

    IMF officials emphasise that Pakistan must fulfill the conditions outlined in the agreement to achieve economic stability.

    Prime Minister Shehbaz Sharif has also assured the IMF Managing Director of the government’s commitment to implementing the agreement in its entirety.

  • Pakistan’s foreign exchange reserves rise to $8.4 billion

    Pakistan’s foreign exchange reserves rise to $8.4 billion

    Foreign exchange reserves held by the State Bank of Pakistan (SBP) have surged by over $4 billion following a deposit of $1.2 billion from the International Monetary Fund (IMF).

    As per data shared by the central bank, Pakistan has also received $1 billion from the UAE and $2 billion from Saudi Arabia, resulting in a significant increase in the SBP’s foreign exchange reserves, which now stand at $8.4 billion.

    During a televised address earlier today, Finance Minister Ishaq Dar stated that Pakistan’s foreign exchange reserves are projected to reach approximately $13-$14 billion by July 14.

    He emphasised that Pakistan is experiencing a resurgence in development and prosperity. Minister Dar acknowledged the instrumental role played by Prime Minister Shehbaz Sharif in reaching an agreement with the IMF, highlighting the unwavering support provided by the economic team throughout the intricate process.

    It is noteworthy that the International Monetary Fund granted approval for a $3 billion loan to Pakistan, subsequent to the signing of a staff-level agreement last month.