IMF says discussions with Pakistan 'productive', looks forward to continuing dialogue

The International Monetary Fund (IMF) said on Tuesday that discussions to date in the context of the 9th review of Pakistan's Extended Arrangement under the Extended Fund Facility (EFF) have been productive, and it was looking forward to continuing the dialogue.

"Discussions to date in the context of the 9th review have been productive," IMF Resident Representative in Pakistan Esther Pérez Ruiz told Business Recorder via message.

"Discussions have enabled a revision to the macroeconomic outlook post floods as well as an in-depth evaluation of fiscal, monetary, exchange rate, and energy policies adopted since the completion of the combined seventh and eight reviews.

"The IMF looks forward to continue the dialogue over policies that adequately address the humanitarian and rehabilitation needs from the floods, while also preserving fiscal and external sustainability given available financing."

The IMF review for the release of the next tranche of funding has been pending since September, leaving Pakistan in dire need of external financing.

Its statement comes as Pakistan's policymakers scramble to secure additional funding from different avenues with foreign exchange reserves held by its central bank dropping to their lowest level since January 2019, and barely enough to cover 1.5 months of imports.

The low level of reserves has put pressure on the currency, which has started to decline in the inter-bank in recent days, and also given birth to an 'informal' or 'grey market' where higher premiums have attracted foreign remittances.

Finance Minister Ishaq Dar reiterated on Tuesday that Pakistan is seeking financial help from Saudi Arabia that will include doubling the current deferred oil payment facility given by Riyadh to $2.4 billion per year.

"I have discussed both things (financial help and oil facilities) with the Saudi finance minister, and there are positive vibes from there. They said they will support us," Dar said during an interview with local television channel.

He added that the government was in touch with the Saudi authorities, but did not give a time-frame as uncertainty over Islamabad's ability to secure foreign exchange inflows persists.

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