Tag: Nathan Porter

  • IMF mission holds crucial talks with FinMin Aurangzeb on $3 billion SBA

    IMF mission holds crucial talks with FinMin Aurangzeb on $3 billion SBA

    In a pivotal meeting held on Thursday, Pakistan’s Finance Minister, Muhammad Aurangzeb, engaged in discussions regarding structural reforms and the viability of the energy sector with the visiting International Monetary Fund (IMF) mission.

    The mission’s visit is part of the second review process of the $3 billion Stand-By Arrangement (SBA) established between Pakistan and the international lender.

    Key points of deliberation encompassed various facets of Pakistan’s macroeconomic landscape, including fiscal consolidation efforts by the government, structural reforms, energy sector sustainability, and governance of state-owned enterprises (SOEs).

    Expressing a warm reception, the finance minister underscored the government’s steadfast commitment to collaborating with the IMF to drive forward the reform agenda, aimed at fostering economic growth and bolstering stability across Pakistan.

    During the meeting, Nathan Porter, head of the IMF mission, extended congratulations to Muhammad Aurangzeb on his appointment as the finance minister.

    Anticipations are high that the IMF mission’s visit could culminate in a staff-level agreement regarding the second review of the SBA.

    Since its inception in July 2023, Pakistan has received $1.9 billion out of the allocated $3 billion under the nine-month programme.

    Aurangzeb, articulating the government’s stance, outlined intentions to explore the possibility of acquiring a more extensive and prolonged Extended Fund Facility (EFF) within the IMF framework, with the overarching objective of attaining macroeconomic stability.

    Officials from Pakistan, including Finance Minister Muhammad Aurangzeb and Energy Minister Musadik Malik, apprised the IMF team of the concerted efforts undertaken to implement the prescribed reforms, including the adjustment of energy tariffs.

    An official from the Finance Division, speaking on anonymity, disclosed the IMF’s acknowledgment of Pakistan’s strides in meeting quarterly programmeme targets under the SBA.

    Simultaneously, discussions are underway to chart the trajectory of the subsequent programmeme, with deliberations leaning towards a more extensive endeavour valued at approximately $8 billion.

    Minister Malik elaborated on the government’s energy reform agenda, highlighting recent adjustments in electricity and gas prices aligned with the stipulated schedule.

    The recent levy hike on petrol and diesel, coupled with the augmentation of gas tariffs for domestic consumers, underscores Pakistan’s commitment to fulfilling key conditions outlined in the IMF’s final review.

    Economic analysts anticipate a seamless final review process, citing Pakistan’s commendable adherence to the IMF’s performance targets as a harbinger of success.

  • IMF praises Pakistan’s economic progress and stability efforts 

    IMF praises Pakistan’s economic progress and stability efforts 

    The Executive Director at the International Monetary Fund (IMF), Bahador Bijani, acknowledged a positive trend in the economic landscape of Pakistan, highlighting the effective measures taken by the authorities. 

    The statement was made during an event hosted by Masood Khan, Pakistan’s Ambassador to the US, bringing together representatives from key international financial institutions (IFIs) such as the IMF, International Finance Corporation (IFC), World Bank, and Multilateral Investment Guarantee Agency (MIGA) at Pakistan House. 

    Expressing optimism, Bijani highlighted Pakistan’s significance regionally and globally, asserting that the nation merits enhanced prospects.  

    This observation coincides with Pakistan’s current status under a caretaker government while participating in an ongoing IMF programme. 

    Nathan Porter, IMF Mission Chief to Pakistan, addressed the assembly of over 40 IFI representatives, expressing contentment with the recently concluded staff-level agreement.  

    Porter praised the interim government’s actions and policies, underscoring their dedication to steering the country towards stability. He expressed the hope that this foundation would enable the pursuit of reforms for a more robust, prosperous, and inclusive Pakistan. 

    Porter further commended the State Bank of Pakistan (SBP) for its cooperative efforts and policies aimed at ensuring fiscal stability in the country.  

    Athanasios Arvanitis, Deputy Director of the Middle East and Central Asia Department at the IMF expressed optimism that the upcoming elections in February would bring about the necessary reforms for Pakistan’s progress. 

    Syed Ali Abbas, Advisor Mission Chief UK, European Department at the IMF, echoed similar sentiments, anticipating a more enduring approach following the successful completion of the electoral process. 

    Ambassador Masood Khan underscored the transformative impact of Pakistan’s economic digitization, emphasising the emergence of new opportunities for the youth and professionals in steering the nation towards a promising future. 

    Khan asserted that Pakistan, as a nation of talented individuals, has the potential for significant accomplishments.  

    The statement aligns with earlier commendations from Kristalina Georgieva, Managing Director of the IMF, who lauded the Pakistani government for its adept handling of economic stability and timely implementation of reforms earlier this month. 

  • Pakistan’s forex reserves dip by $79 million amidst external debt repayments

    Pakistan’s forex reserves dip by $79 million amidst external debt repayments

    Pakistan’s total liquid foreign exchange reserves declined by $79 million in the past week, primarily due to external debt repayments. 

    According to the State Bank of Pakistan (SBP), as of November 10, 2023, the country’s total reserves amounted to $12.535 billion, down from $12.614 billion on November 3, 2023.

    During the reviewed week, SBP’s reserves decreased by $115 million to $7.397 billion due to debt servicing. Conversely, commercial banks’ net foreign reserves increased by $36 million, reaching $5.139 billion by the end of the week.

    In a significant development, the International Monetary Fund (IMF) announced on Wednesday that a staff-level agreement (SLA) has been reached on the first review of a nine-month stand-by arrangement (SBA) totaling $3 billion with Pakistani authorities.

    Pending approval by the IMF Executive Board, the SLA signifies a milestone, and upon approval, an amount of SDR 528 million, approximately a $700 million loan tranche, will be disbursed to Pakistan. 

    This disbursement will bring the total funds received under the IMF SBA to $1.9 billion.

    These incoming funds are expected to contribute to replenishing the country’s diminishing foreign exchange reserves. 

    The IMF team, led by Nathan Porter, conducted discussions in Pakistan from November 2–15, 2023, culminating in the announcement of the SLA upon the completion of the economic review.

  • IMF and Pakistan seal agreement on $3 billion SBA, await board approval

    IMF and Pakistan seal agreement on $3 billion SBA, await board approval

    In a significant development, the International Monetary Fund (IMF) declared on Wednesday that its team and Pakistani authorities have successfully concluded the initial review of the $3 billion, nine-month Stand-By Arrangement (SBA).

    This staff-level agreement awaits the approval of the IMF Executive Board.

    Upon endorsement, approximately US$700 million (SDR 528 million) will be accessible, contributing to a cumulative disbursement of nearly US$1.9 billion under the programme.

    A delegation from the IMF, led by Nathan Porter, conducted discussions in Islamabad from November 2–15, 2023, focusing on the inaugural review of Pakistan’s economic programme supported by the IMF SBA.

    The nascent recovery, supported by international partners and enhanced confidence indicators, is attributed to the stabilizing policies outlined in the SBA.

    The disciplined implementation of the FY24 budget, ongoing adjustments in energy prices, and increased inflows into the foreign exchange (FX) market have alleviated fiscal and external pressures.

    The IMF anticipates a decline in inflation in the upcoming months, driven by diminishing supply constraints and modest demand.

    Nevertheless, Pakistan remains exposed to significant external risks, including heightened geopolitical tensions, escalating commodity prices, and potential tightening in global financial conditions.

    It is imperative to persist in efforts to enhance resilience in the face of these challenges, according to the international lender

  • Pakistan expects positive outcome in talks with IMF, eyes $700 million disbursement

    Pakistan expects positive outcome in talks with IMF, eyes $700 million disbursement

    Pakistan is optimistic about the successful completion of the initial review under the $3 billion standby arrangement (SBA) with the International Monetary Fund (IMF). 

    According to reports, the ongoing negotiations, now in their final phase, are anticipated to culminate positively, marking a crucial milestone. 

    Commencing on Monday, policy-level discussions between Pakistani authorities and the IMF are scheduled to persist until November 15, spearheaded by Finance Minister Shamshad Akhtar.  

    The Pakistani delegation, including key figures such as State Bank of Pakistan Governor Jameel Ahmad and Federal Board of Revenue Chairman Malik Amjed Zubair Tiwan, along with representatives from the finance and energy ministries, has been actively engaged in the deliberations. Nathan Porter leads the IMF team in this dialogue. 

    During the latest session, the IMF delegation articulated their recommendations and requirements, while technical-level talks involved the sharing of pertinent economic data with the international lender’s team, according to The News.  

    Sources within the finance ministry assert that Pakistan has diligently fulfilled all stipulated conditions set forth by the IMF. 

    It is anticipated that the staff-level agreement will be finalised during the ongoing policy-level talks, paving the way for the disbursement of approximately $700 million to Pakistan upon the successful completion of the first review. 

    Earlier this month, the IMF review mission commended the Pakistani government for its commendable progress towards economic recovery, as stated by the finance ministry.  

    The IMF’s $3 billion loan programme, sanctioned in July, played a pivotal role in averting a sovereign debt default. The initial tranche of $1.2 billion was disbursed in July, with the remaining amount contingent on subsequent reviews. 

    Finance Minister Shamshad Akhtar has unequivocally ruled out any requests to the IMF for an extension of the SBA programme’s timeframe or an increase in its size. 

  • Pakistan on track to secure second IMF tranche successfully: PM Kakar

    Pakistan on track to secure second IMF tranche successfully: PM Kakar

    Caretaker Prime Minister Anwaar ul Haq Kakar expressed optimism about Pakistan’s upcoming review with the International Monetary Fund (IMF), set for this month.

    The IMF, led by Nathan Porter, will visit Pakistan from November 2–16 to discuss the first review of the country’s current $3 billion stand-by arrangement (SBA).

    Pakistan is navigating a challenging economic recovery path under a caretaker government following an IMF loan programme approval in July, which prevented a sovereign debt default. The country received the first $1.2 billion tranche from the IMF in July.

    Kakar stated that Pakistan has successfully achieved its targets, including revenue goals, and is confident about the negotiations for the second tranche.

    Regarding inflation, the interim prime minister acknowledged a decrease in inflation rates, attributing it to the Pakistani rupee’s appreciation against the dollar and a drop in petroleum prices. 

    The prime minister also encouraged journalists to analyse the impact of the Pakistani rupee’s strength on circular debt and highlighted that stringent measures against smuggling through Afghan transit trade have boosted local industry productivity.

  • IMF team to visit Pakistan next week for crucial $3 billion SBA assessment

    IMF team to visit Pakistan next week for crucial $3 billion SBA assessment

    A delegation from the International Monetary Fund (IMF) is scheduled to visit Pakistan on November 2 to initiate discussions pertaining to the inaugural assessment of the nation’s ongoing $3 billion standby arrangement (SBA). 

    Pakistan is currently navigating a complex journey towards economic recovery, operating under an interim government. 

    This endeavour follows an IMF loan programme sanctioned in July, which was instrumental in averting a potential sovereign debt default. As part of this programme, Pakistan received an initial disbursement of $1.2 billion from the IMF in July.

    Esther Perez Ruiz, the IMF’s resident representative in Pakistan, has disclosed that a delegation led by Mr Nathan Porter from the International Monetary Fund will embark on a mission to Pakistan commencing on November 2, with the primary objective being the evaluation of the current Stand-By Arrangement.

    Additionally, the finance ministry has exerted significant efforts to maintain the budget deficit within the predefined limits agreed upon with the IMF. They issued warnings to the provinces, urging them to curtail their expenditures. Recent provisional estimates indicate that both Punjab and Sindh have made notable strides in this direction.

    However, a notable challenge in the quest to contain the overall fiscal deficit lies in the escalating debt servicing requirements. These obligations are projected to surpass Rs8.3 trillion and reach Rs8.5 trillion for the current fiscal year 2023–24. This surge is attributed to the central bank’s heightened policy rate, a departure from the initial target of Rs7.3 trillion.

  • Pakistan shares plan with IMF to bridge $3 billion financing gap

    Pakistan shares plan with IMF to bridge $3 billion financing gap

    The coalition government of Pakistan has revealed its plan to the International Monetary Fund (IMF) for obtaining an additional $3 billion to fill the financing gap as it tries to persuade the lender to release the next loan tranche.

    In order to conclude talks with Pakistan regarding its delayed bailout, the IMF required “necessary” financing guarantees as soon as possible. Pakistan was asked to raise $6 billion in external financing, which is required by the country until June to avoid a potential default.

    This figure was determined on the assumption that the current account deficit would remain at around $7 billion in the current fiscal year. The IMF welcomed the recent announcement of financial support from key bilateral partners, but this support is inadequate for Pakistan’s requirements.

    Islamabad informed the IMF about its plan to secure a $450 million second Resilient Institutions for Sustainable Economy (RISE-II) budget support loan, as well as its plans to obtain $1 billion from the Asian Infrastructure Investment Bank (AIIB) and other commercial banks, and to materialise pledges made at the Geneva moot. According to sources, once the staff-level agreement is signed with the IMF, it will become easier for Pakistan to obtain financing.

    Pakistan’s foreign exchange reserves have fallen to cover barely a month of imports following the stall in IMF funding in November, which was later complicated by snags over fiscal policy adjustments after officials from the lender visited Islamabad for talks in February. The fiscal policy adjustments were part of the ninth review exercise on a bailout package agreed upon in 2019, whose resumption is crucial for Pakistan to avoid the risk of defaulting on external payment obligations.

    Pakistan will receive another disbursement of more than $1 billion from the IMF programme before it ends in June, which will unlock other bilateral and multilateral financings for the country, helping to ease its financial difficulties.

    Programme loans from other multilateral agencies await completion of the IMF review, as reported by central bank governor Jameel Ahmad during the spring meetings of the lender and the World Bank in Washington.