Pakistan hopeful of $1.1B IMF loan before budget
Islamabad, June 7 (EFE).- Pakistan is optimistic that the International Monetary Fund (IMF) will release a $1.1 billion loan before the government presents its annual budget on Friday.
“We are hoping for the signing of the IMF agreement before the budget,” the finance ministry told EFE in a written response on Wednesday.
The cash-strapped nation of around 230 million people expects the resumption of the IMF program amid a deepening political instability with general elections due in October.
As part of an IMF condition, Pakistan was to arrange $6 billion in external financing to revive the long-delayed $6.5 billion bailout program signed with the IMF in 2019.
The country has already arranged $4 billion and is looking to secure $2 billion more to meet the loan condition.
“According to our understanding, half of the $6 billion was to be arranged before the IMF’s board meeting and the remaining afterwards,” the ministry statement said. “As of now, $4 billion is already lined up.”
The statement said Pakistan was committed to mobilizing the $6 billion in foreign exchange liquidity despite a significant contraction in the current account deficit.
If approved, Pakistan will receive the $1.1 billion IMF tranche as part of the program that otherwise expires by the end of June.
The ministry said Pakistan remained committed to completing the IMF program and demonstrated its seriousness by completing all the prior actions for signing the staff-level agreement.
Pakistan last received an IMF tranche as part of the program in August 2022.
Despite holding extended talks with the global lender earlier this year, the government has not convinced the IMF to resume the stalled program.
Last week, the central bank reported that its foreign currency reserves had fallen to just over $4 billion, barely enough to cover a month of imports.
On Friday, Pakistan allowed barter trade with Iran, Afghanistan, and Russia to save depleting foreign currency reserves.
Last month, inflation hit an all-time high of nearly 38 percent.
The Pakistani rupee has also depreciated by 53 percent against the US dollar since April. EFE
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