Pakistan denies ‘failure’ of IMF talks, says negotiations still underway

KARACHI: Pakistan’s finance ministry on Saturday denied media reports regarding the “failure” of talks with the International Monetary Fund, saying the negotiations to revive the $6 billion loan program were still underway.
The country’s top economic officials have been in conversation with the international financial institution since the beginning of the month to form the basis for the completion of the sixth review of the bailout package.
A successful completion of the review will enable the country to receive about $1 billion from the fund.
While the outcome of the dialogue is yet to be announced by the two parties, certain local media outlets have already proclaimed its failure.
“Media reports about the failure of talks amid ongoing negotiations are not true,” Muzammil Aslam, the spokesperson to the country’s finance chief, told Arab News. “As soon as the dialogue concludes, a statement will be issued for public information.”
The IMF country head in Pakistan, Teresa Dabán Sanchez, also said on Friday negotiations with Pakistan were still continuing to arrive at an understanding.
“We are looking forward to our continued discussions with the Pakistani authorities on the set of policies and reforms that could form the basis for the completion of the 6th review under the EFF [Extended Fund Facility],” she told Arab News.
The uncertainty surrounding the talks with the IMF has exerted pressure on Pakistan’s national currency which hit a historic low on Friday and closed at Rs174 against the US dollar.
The country’s stock exchange also suffered losses for the same reason, making analysts point out that failure of the IMF talks would negatively impact the country’s foreign currency inflows.
“A successful conclusion of these negotiations will ease pressure on the stocks and the rupee and will change the market sentiment,” Tahir Abbas, director research at Arif Habib Limited, told Arab News.
The IMF wants Pakistan to ensure domestic revenue mobilization, reduction in power sector arrears, electricity subsidy reforms and more operational autonomy to the central bank.
The government already raised power tariffs last week, making analysts claim it was trying to fulfil the conditions imposed by the international financial institution.
People familiar with the development said the IMF was insisting on increasing the revenue collection threshold set in the federal budget.
Pakistan said it wanted to collect Rs5.83 trillion ($39.2 billion) in revenue during the current fiscal year.
Economists believe additional revenue collection will be a tough challenge for the political administration in the current situation since prices of essential items are already toward a higher side.