Feb 8, 2023
IMF Seeks Pakistan’s Plan for Relief, Economic Solutions
(Bloomberg) -- Pakistan is optimistic its nearing an agreement with the International Monetary Fund to resume a $6.5 billion bailout package, a funding that will alleviate distress in a nation facing severe shortage and soaring inflation.
The South Asian nation is hopeful to reach a consensus on pending issues with the IMF in talks that are in its final stage, finance minister Ishaq Dar tells reporters in Islamabad. The issues will be resolved within 24-48 hours, Pakistan Energy Minister Khurram Dastgir Khan told Geo Television in an interview Feb. 8, suggesting talks would extend from a scheduled conclusion on Thursday.
“Detailed and vigorous discussions have been held in the past 10 days and I hope talks will be concluded successfully,” Khan said. “We will be able to revive this program. There is no deadlock.”
The mood has brightened since Prime Minister Shehbaz Sharif’s remarks last week that the IMF is giving the government a “tough time” with negotiations. Sharif’s comments came after the government already loosened grip on the rupee and raised fuel prices to meet IMF conditions even if it means paying a political cost during national elections later this year.
The rupee advanced 1% to 270.51 per dollar, while the benchmark stock index rose 1.8% at close, up a fourth day. Its dollar bonds also gained with notes due in 2024 indicated 4.5 cents higher, to trade at 59.6 cents on the dollar, the biggest jump in about two month.
“The IMF repeatedly asked for a solid plan for whatever relief government wants to give and issues to solve so they report accordingly,” Khan said, signaling that the Fund is open to reaching a consensus. No change would be made in the base tariff on electricity, he said.
Why Pakistan Is Struggling to Get Another IMF Bailout: QuickTake
Pakistan has a tumultuous track record with the IMF. Most of its previous bailouts — 13 since the late 1980s — weren’t completed.
The government secured a $1.1 billion loan in August, part of a $6.5 billion package agreed upon in 2019. But it has been halted multiple times because of Islamabad’s failure to meet loan conditions and disagreements over spending plans after the floods.
--With assistance from Jim Silver, Sanjit Das, Karl Lester M. Yap and Ronojoy Mazumdar.
(Updates with minister comments in second paragraph, asset movements in fifth)
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