The International Monetary Fund (IMF) on Thursday confirmed that the Fund’s board will meet on September 25 to discuss the $7 billion Extended Fund Facility (EFF) to Pakistan.
Pakistan expected to secure a deal with the Fund in August after the lender approved the 37-month programme agreed upon in July. The country also raised its tax revenue target by a record 40 per cent and hiked energy prices to meet the global lender’s demands.
The country also completed its previous $3 billion loan programme in April and secured a credit rating upgrade from both Moody’s Ratings and Fitch Ratings late last month.
Addressing a press briefing today, IMF’s spokesperson Julie Kozack said that the Fund had reached a staff-level agreement with Pakistan on the EFF in July.
“We are very happy that we can say now that the board meeting is scheduled to take place on September 25,” she said.
“This is following Pakistan obtaining the necessary financing assurances from its development partners. The new EFF arrangement… follows the successful implementation of the 2023 nine-month standby arrangement.”
She added that consistent policymaking has supported economic stability in Pakistan, most notably a resumption of growth, significant disinflation, and a significant increase in the country’s international reserves.
Asked if Pakistan has received those assurances, she responded, “Yes.”
Responding to the development, Finance Minister Muhammad Aurangzeb expressed gratitude to those involved in the negotiations.
In a statement from the finance ministry, Aurangzeb said, “By the grace of God, all matters with the IMF have been settled amicably.”
He expressed gratitude to Prime Minister Shehbaz Sharif’s team, the IMF negotiators, and the relevant institutions.
“These matters will be finalised in the meeting of the board of IMF this month,” Aurangzeb said. “The economy is moving towards growth after stabilisation.”
The finance minister added that the reduction in the policy rate will “increase investment and business activities in the country”.
“Increasing economic activities will create employment opportunities,” Aurangzeb stated. “The common man has started getting relief from the trend of continuous reduction in the rate of inflation.”
The State Bank (SBP) Governor Jameel Ahmad had earlier said that the country arranged over $2 billion in financing from lenders other than the IMF, adding that the external financing was seen as the “final hurdle” for the loan, according to a report published by Bloomberg today.
The SBP governor made these remarks at an analyst briefing after announcing the slashed policy rate on Thursday.
“All those assurances and external financing have already been arranged by the government and I don’t see any further hurdle now in taking our case to the board,” said Ahmad.
Prime Minister Shehbaz Sharif, while addressing a meeting of the federal cabinet earlier in the day, had said that negotiations with the IMF were “progressing positively”, the state broadcaster, Radio Pakistan reported.
The prime minister also thanked friendly countries for “overwhelmingly supporting Pakistan”, the report said, adding that he also stressed the need to rid the country of the loans and put it on its own feet.
