The International Monetary Fund (IMF) has no reason to put off approving the staff-level agreement after receiving financial guarantees from allies, according to Prime Minister Shehbaz Sharif on Saturday. However, a Fund official said the lender was looking forward to receiving “necessary financing assurances” as soon as possible to clear the way for the conclusion of the ninth review of the $7 billion program.
IMF Mission Chief to Pakistan Nathan Porter made the announcement a day after Finance Minister Ishaq Dar confirmed $1 billion in bilateral financial help for Pakistan, which is thought to be the final prior action for staff-level agreement with the international lender.
PM Shehbaz remarked, “The IMF had set a condition for us to arrange funds from friendly countries before it signed a staff-level agreement with us,” while speaking at an event in Lahore. We worked hard for one and a half months to achieve the IMF’s final need by first getting a rollover of $2 billion from China and then $3 billion from Saudi Arabia and the UAE.
The premier complimented Bilawal Bhutto-Zardari and Ishaq Dar for their “hard work” in this regard and stated that “the new army chief made efforts to acquire the funds from Saudi Arabia and the UAE.”
He expressed the resolve to overcome these obstacles by reaching an agreement with the international lender as quickly as possible, despite the fact that his government “inherited an IMF agreement that was in tatters.” He agreed that there was “no alternative” and that the government had to comply with the strict requirements established by the IMF.
The Fund expressed satisfaction at the confirmation of bilateral assistance to Pakistan but requested additional guarantees to finalize the agreement with Islamabad.
According to a statement, during meetings between the Pakistani delegation and IMF staff and management, an agreement was reached to maintain robust policies and secure sufficient financing to support implementation efforts.
The statement added, “The IMF is supporting these efforts and is eager to receive the necessary financing assurances soon, paving the way for the successful completion of the 9th External Fund Facility review.”
An official source stated that the Fund is still waiting for guarantees from friendly countries, who are contesting an earlier government statement that claimed assurances of $2bn from Saudi Arabia and $1bn from the UAE would resolve the issue. Mr Dar also announced that the State Bank had received the last disbursement from the Industrial and Commercial Bank of China worth $300 million out of its $1.3bn loan.
IMF head Kristalina Georgieva expressed her hope that Pakistan would complete its current programme. “My hope is that with the goodwill of everyone and the implementation of what has already been agreed upon by the Pakistani authorities, we can successfully complete our current programme,” she said at a news briefing in Washington.
Meanwhile, Mr Dar held a virtual meeting with Jin Liqu, the Asian Infrastructure and Investment Bank (AIIB) president, through a video link as part of the IMF/World Bank spring meetings.
An official announcement stated that Mr Dar shared the current economic outlook and briefed the AIIB president on the government’s economic policies and reforms for sustainable development. The AIIB president praised the bank’s relationship with Pakistan, according to the announcement.