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Thursday, July 18, 2024

US to assist Pakistan with IMF deal: report

Reportedly, Pakistan has been "seeking Washington's support" for renewing its Extended Fund Facility (EFF) with the IMF.

The US has agreed to assist Pakistan in negotiating a deal with the International Monetary Fund (IMF), reported Dawn citing diplomatic sources.

According to media reports, Pakistan had been “seeking Washington’s support” for renewing its Extended Fund Facility (EFF) with the IMF.

According to The News, Finance Minister Miftah Ismail and State Minister for Finance Aisha Ghaus Pasha met last week with the US ambassador.

However, the source added that it would not be sufficient as Islamabad would have to establish “contacts” with the US Treasury high-ups to muster up the necessary support after evolving a consensus on the framework, based on which, both sides could make progress for signing a memorandum of financial and economic policies (MEFP) document.

Read more: No agreement reached with IMF, Pakistan continues to struggle

MEEP is a prerequisite for moving towards the signing of the staff-level agreement as it provides the basis of a framework on which both sides evolve a consensus.

“Without broader agreement on the basis of framework, no one could help Pakistan,” the official had said.

Per the publication’s report, Pakistan sought help from the US as the global lender has yet to agree to a staff-level pact despite the government having taken many complicated steps, and Washington has a considerable influence over the IMF’s decision-making as the largest shareholder.

Another report published in Dawn stated Pakistan has not yet received the first draft of MEFP from the IMF as targeted earlier because some issues remained unsettled. “We are working very closely with the IMF and will soon reach some conclusion,” a top finance ministry official told the publication.

The authorities in the finance ministry were expected to conclude the staff-level agreement by Sunday (June 19) based on revenue and expenditure measures that could deliver next year’s preliminary budget (the difference between revenues and expenditures, excluding interest payment) in Rs152 billion surplus.

Read more: PML-N govt seeks US help to revive IMF deal?

The government took the harshest measures to end fuel subsidies and hiked the POL [petrol, oil, lubricants] prices to unprecedented levels to convince the Fund to revive the programme. However, the IMF is still insisting on doing more knowingly that Islamabad has turned into a ”desperate borrower” mainly owing to the depletion of foreign currency reserves.

The Fund still has reservations over Rs9.5 trillion expenditures projected by the authorities for the next fiscal year. The revenue measures in the budget, according to IMF estimates, are also insufficient to deliver slightly over Rs7 trillion target.

On Sunday, PTI Chairman and former prime minister Imran Khan claimed that Finance Minister Miftah Ismail had asked the American envoy for “relief.”

Addressing a virtual address regarding inflation, Khan warned that “Nothing is free everything has a price, US will take our real freedom as a price.”


With input from Geo News