Significant break through has been witnessed to help Pakistan’s struggling economy in bailout bid, the loan deals to be inked with IMF and China.
In a major development, Pakistan and the IMF on Tuesday evening came to an agreement on the federal budget for 2022–2023, which allowed for the revival of the extended fund facility (EFF) after the government pledged to raise an additional Rs436 billion in taxes and gradually raise the petroleum levy up to Rs50 per liter.
The agreement was achieved at a meeting between the IMF staff mission and the Pakistani economic delegation, which was chaired by Finance Minister Miftah Ismail, over a video link.
Over the following few days, the IMF mission and the State Bank will finalize the monetary targets, and in the interim, they will share the draft of a Memorandum of Economic and Financial Policy (MEFP).
In other development,
To assist the country’s cash-strapped economy in the aftermath of declining foreign exchange reserves and the depreciation of its currency, Pakistan signed a credit facility agreement with a Chinese consortium of banks on Wednesday for 15 billion yuan (USD 2.3 billion). Pakistan Finance Minister Miftah Ismail made the announcement in a twee. “The Chinese consortium of banks has today signed the RMB 15 billion (~$2.3 billion) loan facility agreement after it was signed by the Pakistani side yesterday. Inflow is expected within a couple of days. We thank the Chinese government for facilitating this transaction,” the minister wrote in a tweet.