In a development that would bring some sense of clarity to volatility-hit financial markets, the Ministry of Finance said on Thursday that the sixth review of the Extended Fund Facility (EFF) would be presented to the International Monetary Fund (IMF) board on January 12.

The development was shared through a tweet by Muzzammil Aslam, spokesperson for the ministry.

“I am pleased to confirm 6th review will be presented to IMF Board on 12th January, 2022,” tweeted Aslam on Thursday.

The announcement comes at a time when volatility has taken toll on Pakistan's currency and stock markets. The rupee currently stands at its weakest level, while the KSE-100 Index has retreated in the past few months.

The review, which could see the release of over $1 billion, would also bring much-needed respite to the economy that faces a ballooning current account deficit, which stood at $1.9 billion in the month of November alone on account of an higher import bill.

The country’s import bill jumped by 64% or $ 25.1 billion—in the first four months of the current fiscal year from July to October—compared to $15.2 billion recorded in the same period last year.

Last month, Pakistani authorities and the IMF reached a staff-level agreement on policies and reforms needed to complete the sixth review under the $6-billion Extended Fund Facility (EFF) that started in 2019, but had been put on hold last year.

The IMF said back then that "the agreement is subject to approval by the Executive Board, following the implementation of prior actions, notably on fiscal and institutional reforms". Completion of the review would make available Special Drawing Rights (SDR) 750 million (about US$1,059 million), bringing total disbursements under the EFF to about $3,027 million.

However, since the staff-level agreement, development on the IMF front has remained stagnant.

Days ago, the State Bank of Pakistan's (SBP) Monetary Policy Committee (MPC) raised its key interest rate by 100 basis points, taking it to 9.75%, a hike seen by many as one of the prior actions needed for the IMF approval.

This was the third successive interest-rate increase since September 2021. In the previous announcement, the MPC raised the rate by 150 basis points.

This story was first published in Business Recorder on Dec 23, 2021.