Pakistan inches towards IMF deal as UAE confirms $1b

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ISLAMABAD    -    In a major step towards revival of much needed International Monetary Fund (IMF) loan pro­gramme, Pakistan has finally received confir­mation of one billion US dollars from United Arab Emirates (UAE), which was the last hur­dle in finalizing the staff level agreement with the Fund.

"IMF program — 9th Review Update: UAE authorities have con­firmed to IMF for their bilateral support of US $ One billion to Paki­stan. State Bank of Pa­kistan is now engaged for needful documenta­tion for taking the said deposit from UAE au­thorities," said Finance Minister Ishaq Dar on Friday on Twitter.

Pakistan has already met all prior actions re­quired for finalization of staff level agreement with the IMF. However, it was looking for con­firmation of inflows from the friendly coun­tries on the directions of the IMF. 

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Saudia Arabia already has confirmed to pro­vide $2 billion, whereas confirmation of $1 bil­lion from another coun­try was awaited. Now, the government ex­pressed the firm hope that after the confir­mation the staff-level agreement would be fi­nalised in the next few days, which would be followed by the IMF Board’s approval.

Pakistan and IMF have yet to reach a staff level agreement as both sides are continuously nego­tiating since January 31 this year. The government had met all prior actions of the IMF. The government has taken all tough deci­sions including increasing power and gas prices mas­sively and imposing new taxation measures worth of Rs170 billion. Paki­stan has also accepted two more conditions. The gov­ernment, on the IMF de­mand, has imposed a sur­charge of up to Rs3.23 per unit on electricity consum­ers across the country from July 1. The State Bank of Pa­kistan has also increased the interest rate on the di­rection of the IMF. The re­vival of the IMF programme would provide one billion dollars inflows to Pakistan but it would also pave way for getting funds from oth­er bilateral and multilater­al sources to increase its its foreign exchange reserves. The foreign exchange re­serves stand at $4 billion while it needs to pay $2.2 billion in the quarter end­ing June. It expects to roll over a debt of $2.3 billion, according to State Bank of Pakistan Governor Jameel Ahmad.

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