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Pakistan

Pakistan has to give assurances on financing BOP deficit: IMF

  • External financing is one of the last in a string of prior actions the lender wants Islamabad to complete before it clears funding, IMF representative says
Published March 6, 2023

KARACHI: Pakistan will be required to give an assurance that its balance of payments deficit is fully financed for the remaining period of an International Monetary Fund (IMF) programme, the lender’s resident representative said.

The external financing is one of the last in a string of prior actions the lender wants Islamabad to complete before it clears funding stalled since late last year, Esther Perez Ruiz told Reuters in an e-mailed response on Monday.

Pakistan hopes to sign a staff-level agreement with the IMF after over a month of negotiations to settle policy framework issues aimed at curtailing the fiscal deficit ahead of the annual budget around June.

$1.3bn financing from China’s ICBC expected

Pakistan has completed almost all of the prior actions except for the external financing requirement the IMF wanted it to for clearing $1.1 billion in disbursements under the $6.5 billion Extended Fund Facility agreed in 2019.

The programme ends in June.

“All IMF programme reviews require firm and credible assurances that there is sufficient financing to ensure that the borrowing member’s balance of payments is fully financed over the remainder of the programme.

“Pakistan is no exception,” IMF’s Ruiz said.

On back of loan from China, SBP-held foreign exchange reserves increase $556mn, now stand at $3.81bn

Finance Minister Ishaq Dar said last week that the external financing assurance was not one of the IMF’s conditions for clearance of the funding.

He said Pakistan needed $5 billion external financing for the balance of payments deficit in the fiscal year ending June 30, adding the IMF believed it should be $7 billion.

Pakistan, IMF to reach staff-level agreement by next week: Ishaq Dar

The IMF representative also said that Pakistan was committed to align its official and informal foreign exchange market rates, days after the cash-strapped country’s currency plunged dramatically.

A permanent power surcharge on consumers was also among measures planned by Pakistani authorities to address energy sector debt, she said.

Moody’s downgrades Pakistan’s rating to Caa3, changes outlook to stable

Comments

Comments are closed.

John Mar 06, 2023 01:47pm
Translation: IMF does not trust the crooks & their sponsors! Period!
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MKA Mar 06, 2023 02:08pm
@John, Present and prior.
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Truthisbitter813 Mar 06, 2023 02:16pm
@John, Jaani bhai, please do tell when exactly was the IMF program originally upended and by whom. Or would that take a cut out of your pay-check?
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ProPakistani Mar 06, 2023 02:20pm
When house is not in order, everyone plays games. Friendly countries want IMF to disburse loans to consider investment / further financing (which they are hesitant) considering Pakistan's economic situation / credit rating and IMF wants them to disburse in advance. Friendly countries are not in business of doing credit analysis of countries, it is IMF job. IMF is delaying this installment and creating more investor mistrust / more downgrades. I can't comprehend what is the objective of IMF to support their member countries or put pressures on them and be reason for their credit rating downgrades/ worsen situation. I do understand that our leaders were not forthcoming in their commitments earlier, if they were so good, we would not be third world countries and not asking for loans (what some leaders state begging). This reminds me what Iqbal said "KHUD TO KAR BLUND INTNA KEY HER ........". Time for Pakistani nation to either rise or be in history books. Long Live Pakistan"
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IMF Mar 06, 2023 03:00pm
@ProPakistani, because the US wants to punish PK. Globally US and China are at odds, PK is closer to China and also not saying anything on Russia / Ukraine - IMF is the tool to punish us. Once down and out, they will then put us in another program and subjugate till the end - cant blame them, our ball-less leaders and our establishment have been our decline since 1948 -in fact they benefit from all this
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Pakistani Mar 06, 2023 03:12pm
chahtayyyyyy kya hooooo
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Pakistani Mar 06, 2023 03:13pm
jaan lena rehgaya hai
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Ahad Nawaz Mar 06, 2023 03:13pm
Khan
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ProPakistani Mar 06, 2023 03:20pm
@IMF, Yes, everyone has to be blamed. Muftah now-a-days is pointing structural issues which are the reasons for this mess. Large population which is mostly uneducated / under-educated by global standards, in-efficient population where output is way lower comparing with other counties, polarized population which never became nation with one objective to make Pakistan respectable society and what you mentioned in your post. Pakistan needs revolutionary change, question is who is sincere to do this and who has capacity to handle revolution??
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Azaree Mar 06, 2023 03:23pm
@IMF, Right on the money! Not the IMF money :-)
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Azaree Mar 06, 2023 03:25pm
The clueless and "nothing up stairs" leaders do not realized they have been trapped in an economic warfare!
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Muhammad Zeeshan Mar 06, 2023 03:32pm
Bad deal agreed by a very bad and chilidish governement of Pakistan in 2019, we all are paying the price.
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Muhammad Zeeshan Mar 06, 2023 03:34pm
Have to go in another programme after June 2023
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Dr.Salaria, Aamir Ahmed Mar 06, 2023 03:45pm
Credibility is certainly not something that can be expected from Pakistan, a rogue and islamist terror nation that spreads chaos to the entire world
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Dr.Salaria, Aamir Ahmed Mar 06, 2023 03:48pm
Shebaz and Dar offered their political career on IMF alter. Now they have even put Pakistans dignity, the masculinity of every male Pakistani and Pakistans sovereignty before IMF chopping block.
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Shiteistan Mar 06, 2023 04:00pm
Send Maryam to DC. She will cast a spell on them with her sexy pout. Afterwards all will be OK for the land of the poor.
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Mona Malik Mar 06, 2023 04:21pm
I need loan for business
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Muhammad saqib arhsad Mar 06, 2023 04:36pm
Khuda k khof kro
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Muhammad Ali Mar 06, 2023 04:38pm
Beggars are losers always. There should no question of further borrowing to service the debt & BOP support. Further ahead of it is plunge only. No government ever worked to make Pakistan viable & same are the current crooks. Why not all luxury imports are completely banned from today? Ban on more motorways, ban on trucks & cars ; only busses & railways. No salaries to any parliamentary members right from senate till local body members. No solution to Pak Economy except with emergency measures.
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Junaid Mar 06, 2023 05:26pm
@Muhammad Ali, question is who got money and where is money? Next money will end paying back old loans. They want to enslave next generations
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Fouzi Mar 06, 2023 05:47pm
how insane it is. when imf can dictate to hike interest rates,tax slabs,power tariffs, removal of subsidies,why can't they tell the government to adopt this and that method to increase the foreign exchange reserves
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Shahrukh Mar 06, 2023 07:30pm
@Mona Malik, Go for the new youth loan scheme launched by State Bank. Quota for women is 30 percent plus. Interest rates are single digit. Option 02 is crowd-sourcing/ funding. What is the idea of your business ?
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Shahzad Khan Mar 06, 2023 10:16pm
ALLAH PAK ka wastee ha ham logoon ku zinda rehne du ab bus kaar du
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