Fri. Jun 2nd, 2023

Image showing the exterior of the International Monetary Fund’s building. — Reuters
  • IMF Executive Board meeting is expected in last week of August, say sources.
  • Pakistan may also get funds from Saudi under the SDR quota, it says.
  • Immediate implementation of NEPRA’s decisions part of staff-level agreement, says sources.

The International Monetary Fund (IMF) is ready for negotiations with the caretaker setup if it comes to Pakistan, Geo News reported, citing sources in the finance ministry.

With the PTI’s victory in the Punjab by-elections, political uncertainty in the country is again on the rise as speculations continue around the PML-N leadership mulling over an early election.

Recently, Pakistan and the IMF finally reached a staff-level agreement over the release of $1.17 billion to support the country’s fragile economy. However, the agreement is subject to approval by the IMF’s Executive Board.

According to the sources, Pakistan may get funds from Saudi Arabia under the Special Drawing Right (SDR) quota. Under the SDR, the Saudi government can transfer its IMF’s loan quota to Pakistan.

Sources in the finance ministry said that talks between Pakistan and IMF are underway, however, Pakistan will have to meet all the pre-conditions as promised for the IMF Board’s approval to acquire the loan amount of $1.17 billion.

“The IMF Board meeting is expected in [the] last week of August and after implementation of all conditions, approval will be granted to release an instalment amount,” said a well-informed source.

According to the sources, levying taxes on petroleum products and the immediate implementation of NEPRA’s decisions is part of the staff-level agreement.

According to The News, sources further said that another condition laid down by the Fund was that Pakistan could only give those subsidies which had been announced in the country’s budget. 

They were of the view that the country’s IMF programme had suffered a setback after February 2022 as the PTI government violated its agreements with the international monetary organisation.

Delay in implementation of reforms did a lot of harm to the economy, they added. They also disclosed that the IMF had no objection to holding negotiations with the caretaker government in Pakistan and that it seemed a likely prospect after the ruling PML-N’s humiliating defeat in the Punjab by-polls.

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