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Tuesday July 23, 2024

PM seeks IMF chief’s intervention to complete pending review

PM Shehbaz directs Ministry of Finance to prepare budget for FY24 along with IMF

By Ayaz Akbar Yousufzai
May 30, 2023
International Monetary Fund Managing Director Kristalina Georgieva calls on Prime Minister Muhammad Shehbaz Sharif on September 21, 2022. — APP
International Monetary Fund Managing Director Kristalina Georgieva calls on Prime Minister Muhammad Shehbaz Sharif on September 21, 2022. — APP

ISLAMABAD: As the fate of the $6.5 billion International Monetary Fund (IMF) bailout programme hangs in balance, Prime Minister Shehbaz Sharif has stepped forward to help the Ministry of Finance, Geo News reported citing sources.

The sources revealed that the premier contacted IMF Managing Director Kristalina Georgieva on May 27 requesting her to intervene in order to complete the pending ninth review as the bailout programme expiry date — June 30 — draws near.

The cash-strapped nation of 250 million is stepping up efforts to secure funding as it teeters on the edge of a sovereign default. Pakistan faces about $22 billion of external debt service for the fiscal year 2024, which begins in July, according to Columbia Threadneedle Investments, which is about five times its reserves.

The coalition government has been negotiating with the Washington-based lender to revive its bailout programme since November, with the financing gap among the biggest roadblocks. There’s about $2.7 billion left to disburse from the $6.5 billion programme that’s scheduled to expire next month.

While the conditions regarding external financing remain in place, the premier has nonetheless directed the Ministry of Finance to prepare the federal budget for the fiscal year 2023-24 along with the IMF.

It was learnt that the lender wants to bridge the gap between the rupee-dollar rate in the interbank and open market.

A day earlier, Nathan Porter, IMF mission chief for Pakistan, said: “IMF staff continues the engagement with the Pakistani authorities to pave the way for a board meeting before the current program expires in end-June.”

Authorities are focusing on the restoration of proper foreign-exchange market functioning, the passage of the fiscal year 2023-24 budget consistent with program goals and adequate financing, he said.

On Sunday, Finance Minister Ishaq Dar said Pakistan will share its budget details with the fund. He added that he would like the IMF to clear its ninth review before the budget, which is due to be presented in early June, as all the conditions for that had already been met.

"They have asked for some more things again, we are ready to give that too, they say that give us budget details, we will give it to them," Dar said in an interview with Geo News.

Regarding the next reviews, he said it would not work for Pakistan if the IMF combined the ninth and tenth reviews of the bailout, adding, "We will not do it, (we) see this is (as) unfair."