Dar says Pakistan expects IMF deal in next 24 hours

LAHORE: Pakistan’s Finance Minister Ishaq Dar reiterated that a staff level agreement for a crucial bailout deal with the International Monetary Fund (IMF) was “very close” and expected in the next 24 hours.

Islamabad is racing against time to unlock at least $1.1 billion under the lender’s ninth review of a $6.5-billion Extended Fund Facility agreed in 2019. The programme expires today (Friday, June 30).

“We are very close to signing a staff level agreement with the IMF,” Dar told Reuters late on Thursday.

“I think it should come some time tonight or maximum within 24 hours … we have finalised everything.”

A source familiar with talks told Reuters that Pakistan and the IMF were also in discussions for the release of the full $2.5 billion pending under the IMF programme.

The source said the staff level agreement was to set to initially unlock around $1.1 billion and then be followed by a “standby agreement” which could release the rest after the programme finishes on Saturday.

A representative for the IMF in Pakistan did not immediately respond to a request for comment.

The agreement, which would be subject to approval by the IMF board, has faced an eight-month delay.

The funds under discussion would offer some respite to Pakistan which is battling an acute balance of payments crisis and falling foreign exchange reserves.

A total of $4 billion have already been released. Dar had earlier told media the government was working on a mechanism to try to unlock the full $2.5 billion pending under the IMF programme.

It was unclear what portion of the funds would be released in the announcement he expected in the next 24 hours.

Earlier statement by IMF

The IMF had acknowledged on Tuesday the steps taken by Pakistan, and said its team is continuing discussions with the aim of quickly reaching an agreement on financial support from the Washington-based lender.

“Pakistan authorities have taken decisive measures to bring policies more in line with the economic reform programme supported by the IMF,” Nathan Porter, IMF Mission Chief to Pakistan, was quoted as saying in a statement to Business Recorder on Tuesday night.

This includes “the passage of a budget by the parliament that broadens the tax base while opening up space for higher social and development spending, as well as steps towards improving the functioning of the foreign exchange market and tightening monetary policy to reduce inflationary and balance of payment pressures that affect particularly the more vulnerable”.

“The IMF team continues discussions with Pakistani authorities with the aim of quickly reaching an agreement on financial support from the IMF.”

The statement, however, did not mark a course of action ahead of the scheduled end of the IMF programme on June 30.