In a bid to seek assurance and support for the key objectives and policies under the recently announced $3 billion bailout programme, a delegation of the International Monetary Fund (IMF) called on Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan in Lahore on Friday — days before the global lender’s executive board meeting to review and possibly endorse the Standby Arrangement (SBA) for Pakistan.
Earlier today, the IMF’s resident representative Esther Perez Ruiz said in a statement that the meetings with political parties were to “seek assurances of their support for the key objectives and policies under a new IMF-supported programme ahead of the approaching national elections”.
It is worth mentioning here that the IMF executive board will meet on July 12 to review the SBA for Pakistan.
The cash-strapped country and the IMF had reached a long-awaited staff-level agreement (SLA) on $3 billion SBA, the global lender announced on June 30.
With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have spiralled into a debt default in the absence of the IMF deal.
“I am pleased to announce that the IMF team has reached a staff-level agreement with the Pakistani authorities on a nine-month Stand-by Arrangement (SBA) in the amount of SDR2,250 million (about $3 billion or 111 per cent of Pakistan’s IMF quota),” Nathan Porter, the IMF’s Mission Chief to Pakistan, had said in a statement.
The $3 billion funding, spread over nine months, is higher than expected for Pakistan. The country was awaiting the release of the remaining $2.5 billion from a $6.5 billion bailout package agreed in 2019.
The deal comes after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.
PTI lauds ‘SBA ahead of elections’
The former ruling party, PTI, welcomed the SBA to preserve macroeconomic stability by anchoring external financing and sound policies ahead of the national elections due in the fall of this year and until a new government is formed, party leader Hammad Azhar said.
Taking to Twitter, Azhar said the IMF team called on the PTI chairman at his residence today (Friday).
The meeting was attended by IMF country chief Nathan Porter who joined virtually from Washington and Resident Representative Ester Perez Luis who was physically present, he added.
Giving details, the former minister said that discussions took place around the staff-level agreement that the IMF reached with the government for a 9-month $3 billion SBA. “In this context, we support the overall objectives and key policies.”
The PTI leader also said they wish to stress the importance of programmes to protect the lower-income segments of the population from high inflation.
The PTI considers political stability and rule of law as integral to the economic stability of Pakistan, Azhar said, adding that following free, fair, and timely elections as per the Constitution, a new government mandated by the people will initiate reforms and engage on a longer-term basis with multilateral institutions to further economic transformation, higher and more inclusive growth.
Earlier, Federal Minister for Commerce Syed Naveed Qamar held a crucial meeting with Ester Perez Luis, the country representative of the IMF.
In a significant development for Pakistan’s economic landscape, the delegation met the finance team of the Pakistan Peoples Party (PPP) including its Senator Saleem Mandviwala.
The meeting, held at the minister’s enclave, was aimed at discussing the possibility of a standby agreement with Pakistan, which would have a profound impact on the nation’s financial stability, an official statement issued by the Ministry of Commerce said.
The PPP team expressed its willingness to support the IMF programme, citing larger national interests as the driving force behind their decision.
Naveed Qamar, representing the PPP finance team, acknowledged the significance of the standby agreement in addressing Pakistan’s economic concerns.
He reiterated the PPP’s commitment to working in harmony with the IMF to ensure the successful implementation of the programme.
The discussion between the IMF representative and the PPP finance team is seen as a positive step towards economic reform and stability in the country.
— With additional input from APP.