An IMF delegation will visit Pakistan at the end of the month to talk about the ongoing ninth review of the country’s continuing funding programme.
Pakistan received a $6 billion bailout from the IMF in 2019, and an extra $1 billion in 2022. However, the lender stopped making payments in November because Pakistan had not advanced its economic and fiscal reforms.
According to IMF Resident Representative in Pakistan Esther Perez Ruiz, “At the request of the authorities, an in-person Fund team is scheduled to visit Islamabad January 31st-February 9th to continue the negotiations under the ninth EFF review.”
A successful visit is essential for Pakistan, which is struggling with a severe balance of payments crisis and is scrambling to seek external finance since its foreign exchange reserves only cover imports for fewer than three weeks.
The cash-strapped nation’s endeavour to reconstruct following disastrous floods last year depends on receiving approval from the IMF, as do multilateral and bilateral finance commitments.
Power sector changes and local and global sustainability restoration initiatives, such as bolstering the fiscal situation while helping flood victims, will be the mission’s primary goals, according to Ruiz.
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She noted that there would also be discussion about the reinstatement of a market-based system to determine the value of the Pakistani rupee. Prior to getting IMF aid, the nation must have such a system in place, but up until this week, it had not.
The value of the Pakistani rupee has declined by about 10% in just two days as a result of the government relaxing price limitations that it had set but with which the IMF disagreed.
After the relaxation of price restrictions established by the government that the IMF opposes, the local currency has lost about 10% of its value in just two days.