On Monday, Finance Minister Ishaq Dar stated that Pakistan has fulfilled all conditions set by the International Monetary Fund (IMF). He expressed hope that the IMF would soon sign the staff-level agreement, which would allow for the release of the $1.1 billion tranche.
Since February, the two parties have been negotiating various conditions and external financing from friendly nations before signing the agreement. Speaking to Geo News, Dar stated that Saudi Arabia and the United Arab Emirates (UAE) have informed the IMF of their commitments to provide $3 billion to Pakistan.
Riyadh has pledged $2 billion, while Abu Dhabi has promised $1 billion. The IMF has also been notified of this, according to Dar. The finance minister emphasized that all conditions for the staff-level agreement have been met, and he expressed optimism that the IMF’s Executive Board would approve it soon.
The country’s foreign exchange reserves have dwindled to cover barely a month of imports since the IMF funding stalled in November. Pakistan must resume the bailout package, which was agreed upon in 2019 and is worth $6.5 billion, to avoid risking default on external payment obligations.
Pakistan had to take several steps demanded by the IMF, including reversing subsidies in its power, export, and farming sectors, raising energy and fuel prices, imposing a permanent power surcharge, among other measures.
These moves have pushed Pakistan’s inflation to its highest level ever, rising to over 35 per cent YoY in March. The IMF programme will disburse another tranche of $1.4 billion to Pakistan before it ends in June, and it will unlock other bilateral and multilateral financing for the cash-strapped country.
In recent weeks, neighbouring China has rolled over $2 billion and refinanced another $1.3 billion.
