ISLAMABAD: With two more waivers for non-compliance, the government and the International Monetary Fund (IMF) are reported to have completed the 4th review of $6.8 billion bailout package, paving the way for disbursement of a $550 million tranche to Pakistan early next month.

Finance Minister Ishaq Dar left for Dubai on Sunday for concluding talks with the IMF mission to Pakistan led by Jeffrey R. Franks. They would hold a joint press conference on Monday in Dubai to announce the completion of the 4th review, ministry of finance’s spokesman and adviser Rana Assad Amin told Dawn.

Mr Franks was expected to visit Islamabad for a joint presser with Mr Dar, but Washington did not give him security clearance in view of the sit-ins being staged by Pakistan Tehreek-i-Insaf and Pakistan Awami Tehreek in the capital and related security alerts issued by the interior ministry and the US administration.

The Pakistani delegation led by Finance Secretary Dr Waqar Masood Khan and the IMF mission led by Mr Franks has been in talks since Aug 6. Dr Khan had returned to Islamabad in the middle of talks last week to have fresh instructions for future commitments as Mr Dar had to remain available in the country on Prime Minister Nawaz Sharif’s instructions for assistance on political issues.

Ishaq Dar in Dubai for concluding talks with the IMF mission

Mr Amin said the talks had progressed well and smoothly notwithstanding two waivers for minor non-compliance of performance criteria as Islamabad had fulfilled all the major structural benchmarks and major macroeconomic indicators were up to the mark.

He said the requests for waivers pertained to non-compliance by the State Bank to meet target for Net Domestic Assets (NDA) and another minor deviation by the federal government on breaching end-June 2014 limit on borrowing from the central bank.

He said the government missed the borrowing limit by Rs15-20bn which was subsequently corrected and met, but since the structural benchmark was for June 30, 2014, the deviation required a waiver.

Pakistan has repeatedly missed performance criteria on limiting NDAs and failure to limit borrowing from the central bank by the government to meet its expenses since it entered the fund programme almost a year ago.

Responding to a question, he explained that the breach on borrowing occurred due to closure of accounts by all arms of the government on conclusion of the fiscal year and required to be covered through SBP borrowing.

After the joint news conference, the IMF mission will return to Washington to submit a report to its executive board for formal grant of two waivers on violation of agreed programme benchmarks.

Mr Amin said the IMF executive board was expected to meet in the second week of September to take up completion of the 4th review and disbursement of the 5th tranche of $550m.

Published in Dawn, August 18th, 2014