The International Monetary Fund has reiterated that some points remain to be cleared with Pakistan before a bailout tranche can be released. The Fund has also emphasised assurances about external funding will have to be provided before things move forward.
“A Staff Level Agreement will follow once the few remaining points are closed,” Julie Kozack, communications director for the IMF, said in a briefing on Friday.
“Timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review,” she added.
However, Kozack did add that Pakistan has started taking necessary steps for stabilisation of the economy.
With $4.6 billion in foreign exchange reserves held by Pakistan’s central bank in the week ending Match 17, enough to cover only about four weeks of necessary imports, Pakistan is desperate for the IMF agreement to disperse a $1.1 billion tranche from a $6.5 billion bailout agreed in 2019.
IMF’s resident representative in Pakistan, Esther Perez Ruiz, said the government had not consulted the fund about the scheme.
Ruiz, in a message to Reuters, confirmed a media report that a staff-level agreement would be signed once a few remaining points, including the fuel scheme, were settled.
She has said that the IMF would ask the government for more details, including how it would be implemented and what protections would be put in place to prevent abuse.
Petroleum Minister Musadik Malik said the scheme wouldn’t cost the government anything extra.
“We can explain all this to the IMF when they ask,” he said, adding that the lender was in touch with the finance ministry not his.
The finance ministry did not immediately respond to a request for a comment.
The International Monetary Fund (IMF) has distanced itself from Pakistan politics stating that the decision to hold elections or not “rests solely with Pakistan’s institutions”.
“Decisions regarding the constitutionality, feasibility, and timing of the provincial and general elections rest solely with Pakistan’s institutions,” IMF’s resident representative in Islamabad Esther Perez Ruiz said.
The statement from the fund comes days after the Election Commission of Pakistan (ECP) decided to postpone the Punjab Assembly elections till October, citing financial and security constraints.
She went on to add that “the IMF sets aggregate general targets (aggregating across federal and provincial government levels) and within these, there is fiscal space to allocate or reprioritise spending/or raise additional revenues to ensure constitutional activities can take place as required”.
Elections in Punjab were scheduled to be held on April 30.
When asked that what is causing the delay in a staff-level agreement between Pakistan and the IMF. Ruiz confirmed that “substantial progress in discussions towards policies to underpin the ninth EFF review”.
“At this point, ensuring there is sufficient financing to support the authorities in the implementation of their policy agenda is the paramount priority. A staff-level agreement will follow once the few remaining points, including the authorities’ recently announced fuel subsidy scheme, are closed.”
