Pakistan: Talks in progress to 'quickly reach agreement on financial support' with IMF

IMF says aiming to quickly reach agreement with Pakistan on financial support

Pakistan is in talks with the International Monetary Fund (IMF) to revive its stalled $6.7 billion bailout program that is set to expire this month. The IMF said on Tuesday that Pakistan is taking "decisive steps" to bring its policies more in line with the economic reform program supported by the fund.

The IMF's Pakistan mission chief, Nathan Porter, said in a statement that the country's authorities have approved a budget that expands the tax base and allows for more social and development spending, and have improved the functioning of the foreign exchange market. He also praised Pakistan's tightening of monetary policy to reduce inflationary and balance of payment pressures that affect the most vulnerable.

"The IMF team continues discussions with Pakistani authorities with the aim of quickly reaching an agreement on financial support," Porter said.

Pakistan is going through a severe economic crisis amid record inflation and interest rates. The country hopes to unlock the IMF lending before the program expires at the end of this week. The IMF program, which was agreed in 2019, has been suspended since February due to differences over fiscal and monetary policies, as well as the impact of the COVID-19 pandemic.

The revised budget appears to fall short of fully addressing the IMF's concerns, but the removal of import restrictions is an important step, JPMorgan Chase & Co. said in a research report. It said Pakistan may not get all the money it wants from the IMF and still may need another loan after elections later this year.

Pakistan's dollar bonds were the top performers in emerging markets as of early Tuesday, with notes due in 2031 rising more than 1.8 cents on the dollar to 39.3 cents, according to indicative pricing data by Bloomberg.

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(1) IMF says aiming to 'quickly' reach agreement with Pakistan to revive .... https://www.arabnews.pk/node/2329071/pakistan.

(2) Aim to quickly reach agreement on financial support, says IMF. https://www.brecorder.com/news/40250135/aim-to-quickly-reach-agreement-on-financial-support-says-imf.

(3) IMF Says Pakistan Taking Decisive Steps Toward Meeting Program. https://www.bloomberg.com/news/articles/2023-06-27/imf-says-pakistan-taking-decisive-steps-toward-meeting-program-ljenfq5z.

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