Pakistan and the International Monetary Fund failed to reach a staff level agreement on Thursday but agreed to a broad framework aimed at satisfying the lender of the last resort in coming days
“Actions and prior actions have been agreed, but the staff level agreement will be signed subsequently,” said Secretary Finance Hamed Yaqoob Sheikh while confirming that the IMF mission is leaving early Friday morning
Finance Minister Ishaq Dar cancelled his media briefing due to the collapse of the talks
The IMF discussed the draft of the Memorandum for Economic and Financial Policies just before the end of the scheduled review talks, leaving no room for the staff level agreement on the same day
To break the deadlock, an unscheduled virtual meeting was held between Prime Minister Shehbaz Sharif and IMF Mission Chief Nathan Porter
Also read: Foreign exchange reserves fall below $3b to nine-year low For clinching the MEFP and the Staff level agreement, the government eventually conceded to almost every demand by the IMF
The Fund has rejected the “gradual approach” proposal of Pakistan, saying everything has to be done upfront
The broad consensus is on leaving the US dollar on the market forces, significantly increasing interest rates and electricity prices, and imposing new taxes
Due to the severity of economic crisis, every agreed measure would be tough on most Pakistanis
Earlier, Express News citing sources had reported that the government had reached a consensus with the IMF mission over the terms of the stalled bailout package
It reported that Dar was expected to announce details of the negotiations in a press conference, but the finance minister later cancelled his media briefing due to the eventual collapse of the talks
Dar said earlier on Thursday that "matters will be settled today" with the IMF and that the people will soon hear “good news”
The IMF mission had been in Islamabad since Jan 31 to sort out differences over the government's fiscal policy that had stalled the release of over $1 billion from the $6
5 billion bailout package signed in 2019
External funding is crucial for the $350-billion Pakistan economy facing a balance-of-payments crisis with the country's foreign exchange reserves slipping below $3 billion for the first time in nine years on Thursday, reducing import capacity to just over two weeks
| Date: | 10-Feb-2023 | Reference: | View Original Link |
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