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Monday, November 27, 2023

Pakistan receives letter of Intent from IMF

Pakistan has received LOT from the International Monetary Fund

The International Monetary Fund (IMF) has sent Pakistan a Letter of Intent (LoI), which brings the payment of the following tranche for the combined seventh and eighth review closer. This is the latest move in the IMF situation, according to Aaj News on Friday.

The Extended Fund Facility (EFF) program’s reactivation was approved by the International Monetary Fund (IMF) on August 02, and it was determined that Pakistan had met all of the goals set for the programme.

Islamabad received the letter of intent (LOI) from the international lender a few days after Pakistan and the IMF established a staff-level agreement. An LOI is a document that states a party’s tentative willingness to conduct business with another.

The receipt of LOI indicates that Pakistan’s agreement with the IMF to disburse two tranches totaling $1.17 billion under a loan facility that has stalled is getting closer to completion.

Read more: Bombardment of Rs.40 billion new taxes following approval by IMF

Miftah Ismail, the finance minister, and Murtaza Syed, the acting governor of the State Bank of Pakistan (SBP), are now required to sign the letter together.

In the second week of July, an agreement at the staff level was made between the IMF and Pakistan. The Fund’s board would examine the staff-level agreement at a meeting scheduled for August 29. The board would also think about increasing a $6 billion programme approved in 2019 by $1 billion.

The last move was completed on July 31 by extending the levy on gasoline, according to Esther Perez Ruiz, the IMF’s resident representative in Islamabad, who claimed that Pakistan had met all of the financial goals established by the organization.

The 7th and 8th reviews have been finished, according to Ruiz, and the Executive Board of the Fund was to convene in the third week of August. Esther Perez hoped that until the board meeting, Pakistan will take action to close the financing deficit.

Read more: Foot-dragging by the IMF

A staff-level agreement for the release of US$1.17 billion under the combined 7th and 8th reviews of Pakistan’s Extended Fund Facility (EFF) was made on July 14 between the International Monetary Fund (IMF) and Pakistan.