IMF Presents Yet Another Demand, Needs Written Undertakings From Friendly Countries

IMF Presents Yet Another Demand, Needs Written Undertakings From Friendly Countries
The International Monetary Fund (IMF) has imposed one more condition for Pakistan to resume a stalled $6.5bn bailout program.

According to sources, after implementing all the preconditions, the Pakistani authorities face one more condition, as the IMF has demanded that the financing countries provide written assurances by June 30.

The IMF demanded that Saudi Arabia, Qatar, and the United Arab Emirates provide written assurances.

The Pakistani government mobilized to get written assurances from all three countries, and the Finance Ministry as well as the Prime Minister's Office are active in this regard.

Sources said that the Pakistani authorities are hopeful of getting written assurances soon, adding that Pakistan has completed the implementation of all pre-conditions. The last condition of the IMF was not to take loans directly from commercial banks, which Pakistan has agreed to.

Sources say Pakistan and IMF officials have also completed negotiations on the revised MEFP, and Pakistan wants the staff-level agreement to be approved at the executive board meeting.

On March 15, US Ambassador to Pakistan Donald Blome expressed hope that a deal between Pakistan and the International Monetary Fund (IMF) will be finalized soon and assured the United States’ readiness to assist Islamabad in its efforts to resume a stalled $6.5 billion bailout program.

The US envoy also said that the IMF deal with Pakistan would take shape in a few days.

While speaking to journalists at an event held on Tuesday, he said that the United States is ready to cooperate with Pakistan to help resolve the impasse with the IMF. He also expressed the US’s willingness to assist Pakistan in dealing with ongoing economic crises.

The envoy also expressed Washington’s willingness to help Islamabad address the current terrorism problem.

Ambassador Donald Blome further said that the two countries’ diplomatic ties have advanced significantly.

The country is seeking a $1.1 billion tranche to address its deteriorating balance of payments crisis, which would also open the door for friendly wealthy capitals to provide assistance to overcome ongoing financial challenges. The IMF and Islamabad have been in discussions regarding a stalled bailout package since late last year.

Negotiations between Pakistan and the IMF continue in an effort to come to a mutually beneficial agreement that will aid the cash-strapped country in resolving its current economic crisis.

It is pertinent to mention here that Finance Minister Ishaq Dar stated last week that the country would sign a staff-level agreement (SLA) with the IMF soon since the government was determined to finish the loan program that was agreed upon in 2019.

Dar reportedly visited the US envoy earlier this week to obtain "lenient treatment" from the IMF, which has been adamant in its demands.

In order to close the gap by the end of June 2023, the IMF has requested that Pakistan affirm that it needs $6 to $7 billion in external funding from Saudi Arabia, the United Arab Emirates (UAE), Qatar, and multilateral creditors.

Despite the Pakistani authorities have carried out every possible move under IMF guidance, the IMF is now seeking 200% guarantees from friendly countries and multilateral creditors to close the financial shortfall on the external account of $6-7 billion through the end June 2023.