Pakistan-IMF deal finalized! Staff-level agreement likely today, says FM Ishaq Dar
2 min read 30 Jun 2023, 06:52 AM ISTPakistan is close to reaching a staff-level agreement with the IMF for a crucial bailout deal, according to Finance Minister Ishaq Dar. The country is waiting for the disbursement of a $1.1 billion loan under the lender's ninth review of a $6.5 billion Extended Fund Facility.
PremiumPakistan Finance Minister Ishaq Dar has said that a staff-level agreement for a crucial bailout deal with the International Monetary Fund (IMF) is very close and expected in the next 24 hours, according to a report published by Dawn, a Pakistani English newspaper.
Speaking to media persons, Dar said, “We are very close to signing a staff-level agreement with the IMF. I think it should come sometime tonight or maximum within 24 hours ... We have finalized everything."
Islamabad has been waiting for a deal after taking policy and fiscal tightening decisions required by the IMF. Pakistan is waiting for the disbursal of $1.1 billion loan under the lender's ninth review of a $6.5-billion Extended Fund Facility agreed in 2019.
With the bailout program set to expire on June 30, Pakistan has also revised its budget for the financial year starting on July 1, and hiked policy rates to 22% in its desperation to clinch the IMF deal.
On Monday, Pakistan's central bank raised its benchmark rate to a record high (100 bps to 22%) in an emergency meeting, in a bid to rescue its loan program with the Washington-based financial body.
The step would “help further anchor inflation expectations – which are already moderating over the last few months, and support bringing down inflation towards the medium term target of 5–7% by the end of FY25, barring any unforeseen developments," the bank said.
The IMF funds subject to approval by its board promise respite for Pakistan, which is battling its worst economic meltdown, with an acute balance of payments crisis and falling reserves of foreign exchange
Cash-strapped Pakistan is going through a severe economic crisis amid record inflation and interest rates. The country is currently struggling to avoid a default with financial help from friendly countries like China, Saudi Arabia, and the UAE.
