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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