IMF team arrives in Pakistan to discuss ninth review

The four-day visit comes after Pakistani rupee dived to a historic low against the United States dollar recently

Published - January 31, 2023 01:27 pm IST - Islamabad

Image for representational purpose only.

Image for representational purpose only. | Photo Credit: AFP

A team from the International Monetary Fund (IMF) arrived in Islamabad to discuss the ninth review of the $7 billion Extended Fund Facility, which will start on January 31, ARY News reported.

According to a Pakistani television broadcast citing the sources, Pakistan and the IMF will hold technical talks for the first four days, wherein economic data from different departments will be reviewed.

Also Read | Explained | Will shutting markets fix Pakistan’s economy? 

Earlier, the international fund organization’s Resident Representative for Pakistan Esther Perez Ruiz said: “At the request of the authorities, an in-person Fund mission is scheduled to visit Islamabad [from] January 31 to February 9 to continue the discussions under the ninth EFF review,” reportedDawn.

The Pakistani rupee has dived to a historic low against the United States dollar after an exchange cap was lifted as the cash-strapped country seeks the help from IMF.

Earlier, Pakistan entered a $6 billion programme in 2019 but later on, it increased to $7 billion. If everything goes well then the international organization would release $1.8 billion, which is still pending, according to Dawn.

It had earlier been put off for two months due to the Pakistan Muslim League-N-led government's unwillingness to accept certain conditions placed before it by the IMF, and the disagreements have yet to be resolved. However, it is pertinent to mention that Pakistan Prime Minister Shehbaz Sharif has indicated that the government is finally ready to swallow the bitter pill of the IMF's "stringent" conditions to revive the loan programme.

In the statement, Ruiz said that the mission would focus on policies to restore domestic and external sustainability, including strengthening the fiscal position with durable and high-quality measures while supporting the vulnerable and those affected by the floods; restoring the viability of the power sector and reverse the continued accumulation of circular debt; and re-establish the proper functioning of the foreign exchange market, allowing the exchange rate to clear the forex shortage.

"Stronger policy efforts and reforms are critical to reduce the current elevated uncertainty that weighs on the outlook, strengthen Pakistan's resilience, and obtain financing support from official partners and the markets that is vital for Pakistan's sustainable development," Dawn quoted her as saying.

Also Read | Can Pakistan’s current economic crisis be fixed? | In Focus podcast

The Financial Post recently reported that with Pakistan Finance Ministry being unable to furnish tenable answers for the IMF to commence formal negotiations on the 9th review, it may delay the release of funds from the IMF.

The IMF visit to Pakistan scheduled for October has been delayed amidst differences between Pakistan's commitment to the IMF on fiscal consolidation. "Pakistan and the global lender continued talks virtually but differences still persisted over tax collection targets, and non-starter energy reforms including hiking of gas tariff, rising circular debt, and expenditure overrun, making consensus harder to strike on a staff-level agreement for completion of the review," according to the Financial Post report.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.