KARACHI: Pakistan’s finance ministry said on Thursday negotiations with the International Monetary Fund (IMF) were continuing under the seventh review of the $6 billion Extended Fund Facility (EFF), adding the country wanted to successfully complete the program in September this year.
Pakistan will get about $1 billion under the EFF after the completion of the current IMF review. The country has already received a little over $3 billion from the international lending agency since 2019 after successfully completing the first six reviews.
Last month, the IMF executive board approved $1 billion disbursement to Pakistan after reviewing the country’s economic and financial reforms. The loan program will be completed after the 9th review which is scheduled to take place in September.
“The negotiations under the 7th review are continuing as planned and the two sides remain engaged on a regular basis at a technical level through virtual meetings and data sharing,” the finance ministry said in an official statement.
“The focus of negotiations under the 7th review has been on the agreed targets between the two sides, as well as the recently announced relief and industrial promotion packages,” it added.
The ministry informed that after the completion of technical talks, the framework for the seventh review will come under discussion, hoping the IMF board would approve the next tranche by the end of April 2022.
“Upon completion of the technical talks, the text of Memorandum on Economic and Financial Policies (MEFP) for the 7th review will come under discussion,” the statement said, adding: “The Government is confident that the finalization of the MEFP will lead to IMF board meeting toward the end of April. The Government remains committed to completing the IMF program successfully in September.”
Experts familiar with the development said, however, the seventh review could be delayed mainly due to the lengthy debates on relief measures worth $1.5 billion and a recent industrial package announced by Prime Minister Imran Khan who is currently facing a no-trust motion.
“At the moment the important aspect of the talks with the fund is the future of the government itself ahead of the no-confidence motion,” Dr. Vaqar Ahmed, joint executive director at the Sustainable Development Policy Institute (SDPI), told Arab News. “Tomorrow [Friday] is a very important day for setting the pace of these negotiations with the IMF.”
Pakistan’s National Assembly is scheduled to begin a new session on Friday in which it is expected to take up the no-confidence motion filed by the opposition against the prime minister.
“Other reasons for the delay in the review process include the announcements of a relief package by the government ahead of the [anti-government] long march by the opposition parties,” he said. “It seems the packages was announced by the government without prior consultations with the IMF.”
The finance ministry maintained, however, that a general understanding had been reached with the IMF on the relief package, though more discussions were likely to take place over the industrial package in the next couple of days.
“On the relief package, complete details, including financing options, have been shared with the IMF and a general understanding has been developed,” the finance ministry said. “The IMF has, however, indicated the need for some further discussions on the industrial promotion package over the next few days. An understanding is expected to be developed on the said package subsequent to those discussions.”
Esther Perez Ruiz, the IMF resident representative for Pakistan, last week told Arab News the global lending agency continued discussions with Pakistan over recent developments to promote macroeconomic stability in the country.
Pakistani analysts said the expected delay in the seventh review was exerting pressure on Pakistan’s national currency which is trading at its lowest value of Rs181.75 against the US dollar in the interbank market.
