A $6 billion IMF package was agreed in 2019, and topped up to $7 billion after last year’s devastating floods, but disbursements were suspended in November due to the government’s failure to do more to reduce its fiscal deficit.
Representational image. Pic/iStock
The Pakistani rupee’s decline slowed on Friday after its value plunged over the previous two days, with hopes raised by an International Monetary Fund team visiting Islamabad next week to discuss unlocking a suspended bail-out package.
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Left with only $3.68 billion in foreign exchange reserves, Pakistan barely has enough to cover three weeks of imports, and desperately needs the IMF to release the next $1 billion tranche of its bail-out programme to head off a potential default.
The IMF said on Thursday that its delegation would visit Pakistan from Jan. 31 to Feb.9, filling Prime Minister Shehbaz Sharif with optimism that the disbursements would start flowing again. “An agreement with the IMF, God willing, will be done... We will soon be out of difficult times,” Sharif said at an event in Islamabad.
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A $6 billion IMF package was agreed in 2019, and topped up to $7 billion after last year’s devastating floods, but disbursements were suspended in November due to the government’s failure to do more to reduce its fiscal deficit.
The IMF wants the government to commit to more substantial fiscal measures, and once it decides to resume lending, other multilateral and bilateral lenders are expected to offer more funding to the politically unstable, nuclear-armed South Asian nation.
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