Pakistan reaches out to US for assistance in obtaining IMF deal

Pakistan has requested assistance from the United States to obtain “lenient treatment” from the International Monetary Fund (IMF) due to a delay in signing the staff-level agreement (SLA).

The international lender has asked Pakistan to confirm external financing needs of $6 to $7 billion from Saudi Arabia, the United Arab Emirates, Qatar, and multilateral creditors until the end of June 2023.

However, Pakistan has been unable to persuade the lender to sign the agreement and has requested assistance from Washington and its western allies.

According to The News, Minister for Finance Ishaq Dar has contacted the US diplomatic corps based in Islamabad for help in ending the stalemate.

The IMF considers that the loan facility’s “sustainability” could not be guaranteed without full assurance of external financing.

Furthermore, the IMF has demanded a permanent abolition of power sector subsidies, which the government had only committed to until the end of the next financial year 2023-24.

The IMF demanded changes in the wording of the Memorandum of Economic and Financial Policies (MEFP) during the last meeting held in the previous week.

The IMF and Pakistani sides are yet to decide on further proceedings, with each side holding the other responsible for the delay in signing the SLA.