ISLAMABAD: The government and the International Monetary Fund (IMF) are inculpating each other for the delay in the revival of the bailout program after the lapse of nearly 80 days since both sides completed Islamabad parleys on 9 February 2023.
Pakistan has less than a month’s worth of forex reserves. It is awaiting a bailout package of 1.1 billion dollars from the Fund that has been delayed since November last year over issues related to fiscal policy adjustments.
The tranche, which can only be released after inking a staff-level agreement, is part of a 6.5 billion dollar bailout package the lending agency approved in 2019, which is vital for Pakistan to avert default on external payment obligations.
Pakistan’s options for reviving the program are shrinking with the passage of time. It is yet to be ascertained how it would proceed to accomplish the existing IMF program, which expires on 30 June 2023, a local media outlet reported on Tuesday.
IMF’s reviews
The IMF’s 11th review under the Extended Fund Facility program will become due on Wednesday when Pakistan can still not accomplish the pending 9th review.
Both had so far been unable to sign a staff-level deal to complete the 9th review. Under the IMF program, the 10th review became due on 3 February but could not be done.
According to media reports, the IMF still awaits confirmation on external financing conditions despite Islamabad guaranteeing 3 billion dollars in additional deposits from UAE and Saudi Arabia.
The IMF is now asking for confirmation on the remaining 2 billion dollars from World Bank (WB) and Asian Infrastructure Investment Bank 900 million dollars and seeking commercial loans from banks.
Without an additional 2-3 billion dollars in confirmation, IMF is reluctant to strike the agreement. On the other hand, Pakistani officials argued that the lending agency was playing politics with the Pakistani side as the deal should have been reached much earlier.
