Pakistan ‘meets all targets’ ahead of IMF second review of $1.1 billion tranche

Ahead of the International Monetary Fund (IMF) mission’s visit to Pakistan from March 14 to 18, the finance ministry announced that it met all targets for successful completion of the programme.

"Pakistan has met all Structural Benchmarks, Qualitative Performance Criteria and Indicative Targets for successful completion of the IMF review. This would be final review of SBA, and staff level agreement is expected after this appraisal," a statement issued by the finance ministry read.

The ministry stated that once the agreement is reached the final tranche of $1.1 billion under the SBA will be disbursed, following the approval from IMF's Executive Board.

Islamabad secured the last-gasp rescue package last summer, averting a sovereign debt default, Reuters reported.

The last review, if successful, will release a tranche of around $1.1 billion, the ministry said.

Prime Minister Shehbaz Sharif has already directed his finance team, headed by newly installed Finance Minister Muhammad Aurangzeb, to initiate work on seeking an Extended Fund Facility (EFF) after the standby arrangement expires on April 11.

The global lender has said it will formulate a medium-term programme if Islamabad applies for one.

The government has not officially stated the size of the additional funding it is seeking through a successor programme from the fund.

‘Large, long programme’

New Finance Minister Muhammad Aurangzeb shared that the government would engage with the IMF for a “large and long programme” under the Extended Fund Facility (EFF), The News reported earlier today.

In his first media briefing after assuming charge, the newly appointed minister laid out his plan for economic stabilisation.

Aurangzeb also hinted at the reduction in the policy rate but added that the Monetary Policy Committee (MPC) is the domain of the State Bank of Pakistan (SBP), which currently enjoys autonomy.

In the post-EFF agreement with the IMF, he said, Pakistan would fetch foreign inflows through commercial financing and launching international bonds.

“The Special Investment Facilitation is an important platform to bring equity and investment from abroad,” the minister said.

He added that the era of securing deposits and rollover from friendly and bilateral partners is over, so viable and bankable projects will have to be put on the table.

All options, including the augmentation of the IMF programme through climate financing and jacking up the size of allocated quota under the EFF programme, will be explored during the upcoming negotiations with the IMF review mission scheduled to be commenced soon, Muhammad Aurangzeb said.

He conceded that there was a trust deficit owing to which the IMF always proposed front-loaded programmes as they knew that after passing through the first or two reviews and getting money, we would run away from implementing the remaining programme.