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Pakistan, IMF says Key claim made in $ 6 billion bail talks


Pakistan’s economy is faltering on the brink of a financial crisis. (File)

Islamabad:

Key progress has been made in talks on reviving Pakistan’s International Monetary Fund rescue program, both sides said on Wednesday, with Islamabad expecting the lender to increase the size and duration of the 39-month, $ 6 billion facility.

The statements came as Pakistan’s economy faltered on the brink of a financial crisis, with foreign exchange reserves drying up rapidly and the Pakistani rupee at record lows against the US dollar as uncertainty surrounded the IMF program.

“Discussions between IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue, and significant progress has been made on the FY23 budget,” said Esther Perez Ruiz, the IMF’s resident in Islamabad. , told Reuters.

Pakistan this month unveiled a budget of 9.5 billion rupees ($ 47 billion) for 2022-23 aimed at tight fiscal consolidation in an effort to persuade the IMF to resume much-needed bail payments.

However, the lender later said additional measures were needed to bring Pakistan’s budget in line with the key objectives of the IMF program.

The two parties held talks on Tuesday night and agreed on the budget and fiscal measures, but must still agree on a set of monetary targets, Finance Minister Miftah Ismail said.

He did not expect any “hiccups” in the remaining talks and expected an initial memorandum on macroeconomic and financial targets and then an official agreement.

Details of the deal were not immediately available to Reuters.

“I also expect the duration of the program to be extended by a year and the loan amount will be increased,” he told Reuters, adding that the IMF has not yet committed to it, but based on talks, he has expect it to come through.

Pakistan was seeking an increase in the size and duration of the program when Ismail met with IMF officials in Washington in April.

Pakistan joined the IMF program in 2019, but only half of the funds have been disbursed so far as Islamabad has struggled to keep targets on track.

The last payout was in February and the next section would follow a review in March, but the government of ousted Prime Minister Imran Khan instituted expensive fuel prices that threw fiscal targets and the program off course.

Pakistan’s new government has lifted the price limits, with fuel prices rising by up to 70% in a matter of three weeks.

(Except for the headline, this story has not been edited by techlives staff and is being published from a syndicated stream.)

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