In order to reach an agreement on the ninth review of the $6.7 billion loan approved in 2019, the International Monetary Fund (IMF) is still working with Pakistan to secure money and policy assurances, a representative for the lender told Bloomberg earlier today.
The crisis lender doesn’t observe any signs that Pakistan wants to put off talks about payments from the present programme. Intriguingly, Islamabad has pledged not to implement its gasoline cross-subsidy scheme in the fiscal years 2023–24 and beyond, according to a statement from the agency’s spokeswoman sent via email.
Regarding the detention of former Prime Minister Imran Khan, the Fund has declined to comment.
After saying on Tuesday that the government seeks to first allay the IMF’s worries before implementing its new gasoline subsidy scheme, Minister of State for Petroleum Musadik Malik reiterated this on Wednesday. We want to ensure that, if we proceed, we address their (the IMF’s) concerns and ensure that they fully comprehend what we are attempting to accomplish and why, he said.
As a result of an earlier Bloomberg report warning that Pakistan might fail in the absence of new finance support, bears were awoken today. The lender’s comments helped to calm them down. It is important to note that the nation’s high debt amortisation against insecure reserves raises concerns about impending default.
The programme will finish at the end of June 2023, and the IMF still has around $2.6 billion to spend.
Since demonstrators have been in the streets since Tuesday, it’s possible that if the situation remains, the IMF may be more cautious about restarting the bailout programme. Even though Pakistan and its investors were accustomed to volatile politics, it may make negotiations with the lender more difficult.