IMF loan agreement for Pakistan delayed due to ‘new demand’

Although Pakistan received assurances from friendly countries about external funds, the International Monetary Fund (IMF) is still showing a lack of confidence and is asking Islamabad to ‘do more’ to unlock the loan programme, The Dawn reported.

According to the sources, Pakistan has been asked to present a repayment plan for a $3.7 billion loan to the IMF in June as well as need to demonstrate more robust support from friendly nations to meet the commitment.

However, the IMF has reportedly not agreed to a proposal to exchange reserves equal to two months’ revenues, valued between $11 to $12 billion.

Sources within the Ministry of Finance revealed that the government has imposed Rs. 170 billion in taxes through the mini-budget to secure a staff-level agreement with the IMF, originally scheduled for February 9.

It is pertinent to mention here that the IMF issued the schedule of board meetings in which Pakistan is only included in any agenda in May 17.

Funding will also not be available from international financial institutions as the staff-level agreement is not reached, moreover, the budget-making process can be affected if transactions with the IMF are not concluded.

Last month, the staff-level agreement between Pakistan and the International Monetary Fund is again ‘delayed’ as the international lender has put a new demand.

As per details, the meeting of Finance Secretary Hamid Yakoob in the US remained ‘unfruitful’ with the International Monetary Fund as the international lender has given the plan to arrange $1 billion from commercial banks to unlock the loan program.

The staff-level agreement was supposed to be signed on February 9 but had been delayed after then over IMF’s demands.