International

Cash-strapped Pak Signs Agreement With IMF

IMF funding is crucial for the USD 350-billion Pakistan economy facing a balance-of-payments crisis with the country's foreign exchange reserves slipping below USD 3 billion.

Photograph of Shehbaz Sharif from the interview
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Cash-strapped Pakistan and the IMF on Thursday signed a staff-level agreement after tough parleys, unlocking over USD 1 billion loan tranche under Extended Fund Facility (EFF) for the country's ailing economy, media reports said.

Citing sources familiar with the development, Geo News said that a meeting took place between Prime Minister Shehbaz Sharif and the International Monetary Fund (IMF) delegation, where the mission informed the premier about the agreement.

Finance Minister Ishaq Dar is expected to announce further details regarding the talks shortly, Express News reported.

The two sides had finally reached consensus over the details of the lending programme, it said, citing its sources.

The IMF delegation led by Nathan Porter began talks on January 31 with the Pakistan side headed by Finance Minister Dar to sort out differences over the government's fiscal policy that had stalled the release of over USD 1 billion from the bailout package.

The IMF funding is crucial for the USD 350-billion Pakistan economy facing a balance-of-payments crisis with the country's foreign exchange reserves slipping below USD 3 billion for the first time in nine years on Thursday, reducing import capacity to just over two weeks.

Pakistan entered a USD 6 billion International Monetary Fund (IMF) programme during Imran Khan's government in 2019, which was increased to USD 7 billion last year. 

The programme's ninth review was pending with talks being held between IMF officials and the government for the release of USD 1.18 billion.

Earlier, Minister of State for Finance and Revenue Aisha Ghaus Pasha said the two sides "are very close to the finalisation."

The successful ninth review would open venues for bilateral loans from different friendly countries and multilateral institutions.

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