ISLAMABAD: The International Monetary Fund (IMF) has said that Pakistan has not formally approached it for renegotiation of the ongoing 39-month Extended Fund Facility (EFF) programme.

This was stated by Ernesto Ramirez Rigo, Mission Chief for Pakistan, the Middle East and Central Asia Department, during a conference call at the launch of combined second to the fifth review of the EFF.

Asked that Prime Minister Imran Khan and Finance Minister Hammad Azhar have recently stated about renegotiating the EFF programme, he said that “they are in constant touch with Pakistan on the implementation of the reform programme and other financial matters; however, not received any request on the renegotiation of EFF programme.”

Replying to a question about heavy lending by China, he said that China is an important bilateral partner of Pakistan and the IMF has no issue in this regard.

He added that the Fund is in touch with the new finance minister of Pakistan, the Finance Division, and the State Bank of Pakistan (SBP) regarding the implementation of policies, and “discussions are underway regarding the achievement of targets and other reform programmes.”

In reply to the proposed SBP law, Rigo said that the SBP should have full autonomy, for which Pakistan has been given a timeframe, adding that “several technical-level talks were held with the Pakistani authorities regarding the draft SBP Act to protect its employees from legal actions, a clear mandate and check and balance through its Board, and they are accountable only to Parliament.”

He further stated that there are significant tax exemptions and there is a need to work on the expansion of the tax base.

According to him, “we are working together on these issues with the Pakistani authorities. Coronavirus pandemic initially affected progress on the IMF programme in Pakistan. The steps taken by the Pakistani authorities to support the economy and provide basic necessities to the people are encouraging, including health measures, financial packages, expansion of social security net, monetary policy support, and targeted financial measures. As a result of these measures, global emergency support was provided that helped to deal with the first wave of the coronavirus. The external accounts situation has also improved and with the resumption of food supply earlier this year, inflation has been gradually declining.”

However, the second wave of coronavirus has begun and uncertainty and economic risks have increased, he added.

Copyright Business Recorder, 2021