Pakistan needs the IMF funding to avoid defaulting on its external debt obligations amid a balance of payment crisis. (Image: Reuters)
The lender is unhappy with the assurances given to it by nations that Pakistan considers ‘friendly’.
Pakistan is unlikely to get the crucial tranche from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) anytime soon, GeoNews reported. GeoNews said that Pakistan’s loan programme is not on the agenda of the lender’s Executive Board till May 17 in its report.
The global lender and Pakistan government have been discussing fiscal policy measures to resume the stalled funding of $1.1 billion due in November. This is part of a $6.5-billion programme agreed in 2019.
If Pakistan unlocks the funds under the ninth review then other multilateral lenders can send funds to the nation in an economic crisis. They have also set the completion of the ninth review as a precondition to unlock funding.
Pakistan needs the IMF funding to avert defaulting on its external debt obligations amid a balance of payment crisis. The forex reserves it currently has is sufficient only for four weeks of imports, that too in a controlled manner.
The IMF is unhappy with the assurances given to it by nations that Pakistan considers ‘friendly’, people familiar with the developments told the Pakistan-based news outlet.
The people mentioned above also said that Pakistan has fulfilled the conditions set by the lender for the revival of the loan facility. They said the delay has the potential to affect the budget planning which is expected to be tabled in the second week of June.
“The IMF continues to work with the Pakistani authorities to bring the ninth review to conclusion once the necessary financing is in place and the agreement is finalised. The IMF supports the authorities in the implementation of policies in the period ahead,” IMF mission chief in Pakistan Nathan Porter was quoted as saying by Reuters last week.
Pakistan has assured the IMF that the balance of payments gap for this year which ends in June will be fully funded.
The Pakistan government announced pledges worth $3 billion in financing support from Saudi Arabia and UAE, but the funds are yet to come through, GeoNews reported. China has refinanced its loans to Pakistan.
The report also said that it remains unclear if the Saudi, UAE and Chinese financing would be sufficient or if the nations would require more external support. The report also said that it also remains unclear why the IMF wanted to work on the technical preparation of the budget, which is not part of the programme.
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