Fund sets prior actions and advance measures. ISLAMABAD - Pakistan and International Monetary Fund (IMF) could not reach a staff-level agreement as the talks between the two sides ended here on Thursday. The visiting delegation, however, has sought some time for the staff-level agreement and set prior actions and advance measures. “The negotiations with the IMF have been completed. The IMF has handed over the MEFP [Memorandum of Economic and Financial Policies] document [to Pakistan],” said Secretary Finance Hamed Sheikh while talking to the media after the negotiations. He further said that IMF has assured Pakistani authorities of striking a staff-level pact in the coming days and the “agreement for releasing the loan will also be signed soon”.
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He also said that the staff-level agreement will not be signed at least on Thursday. He claimed that both the sides have agreed on all points. However, the Fund has set few prior actions, which he did not disclose. He further added that the IMF mission, headed by Nathan Porter, would release a detailed statement later after approval from Washington. The staff-level agreement will be signed after approval from Washington. Pakistan has assured the Fund on external financing from the friendly countries. The IMF has taken assurances from the ambassadors of friendly countries, who would provide financial help to Pakistan. Earlier, Prime Minister Shehbaz Sharif had given a go-ahead to settle all matters with the Fund. He held a meeting with the IMF delegation via a video link Thursday night, and discussed the loan program. During the interaction, the Prime Minister agreed with the Fund for all conditions for the revival of loan programme. The talks between Pakistan and IMF started from January 31 till February 9. Pakistan has accepted the tough conditions of the IMF including increasing electricity and gas prices, announcing mini budget and external financing commitments, particularly from the friendly countries — Saudi Arabia, the UAE and China — besides some other multilateral fundings.
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Sources said that prior actions, needed for the staff-level agreement, are increasing power and electricity prices, bringing mini budget by increasing standard rate of General Sales Tax by one percent to 18 percent. The government would have to take all these decisions in next few days before the staff-level agreement. The government has already accepted some more IMF demands. The government has allowed banks’ access to asset declarations of civil servants of BS-17-22 as a prior condition for the opening of bank accounts as part of good governance and anti-corruption measures. The government in the last week had decided to end its control on its prices in order to fulfil the conditions of the International Monetary Fund (IMF) officials to revive the loan programme. The Fund would release loan tranche of around $1.18 billion in case the talks remain successful. Pakistan desperately needs revival of IMF programme to build its foreign exchange reserves, which have fallen to below three billion dollars. The country’s foreign exchange reserves held by the central bank have fallen to only $2.9 billion mainly due to the external debt repayments. The overall reserves stood at $8.5 billion that included $5.6 billion reserves of the commercial banks
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