Pak, IMF to start talks on Thursday for release of USD 710 mn as loan

Islamabad, Nov 1: Pakistan and the IMF will start their negotiations Thursday for the release of USD 710 million second tranche of a USD 3 billion loan to the cash-strapped country to stabilise its debt-ridden economy – a real challenge for the caretaker government ahead of the elections expected in January. A review mission from the International Monetary Fund (IMF) will arrive here on Thursday and review the country’s economic performance during the first three months of the current fiscal year – from July to September.
“The IMF team led by Nathan Porter will field a mission to Pakistan starting on November 2 on the first review under the current Stand-By Arrangement (SBA) of USD 3 billion,” Esther Perez, the resident representative of the IMF, said last week.
The IMF had proposed November 7 in anticipation of a delay in compiling the first quarter data but the Ministry of Finance assured that all the relevant data was available for the review talks, according to local media reports. While approving the USD 3 billion loan in July this year, the Washington-based global lender had also released the first tranche of USD 1.2 billion. Although essentially a bridge loan, it offered much respite to Pakistan, which was battling an acute balance of payments crisis and falling foreign exchange reserves.
Ahead of the crucial talks, Pakistan was confident to secure the nod of the creditor for release of the second tranche under the short-term loan.
Caretaker Prime Minister Anwaar ul Haq Kakar expressed optimism on Tuesday regarding Pakistan’s upcoming review, Hum News channel reported.
“We have achieved our targets, including revenue goals. We are confident that our negotiations for the second tranche will be successful,” he said. “Pakistan has achieved the structural bench agreed with the IMF and its important condition of increasing gas prices has also been met. Similarly, the circular credit is also within the prescribed limit and the fiscal deficit is in accordance with the set target as well,” the Express Tribune newspaper reported on Wednesday ahead of the talks. It said that the Federal Board of Revenue’s tax collections have exceeded their set target.
There are some difficulties about the external financing required for the budget deficit, but this issue will also be resolved easily too because of the assurances given by friendly countries including China, the UAE and Saudi Arabia, the paper said. (PTI)