Pakistan, IMF reach staff level agreement on second EFF review

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have reached a staff-level agreement on policies and reforms needed to complete the second review of reform programme supported under the Extended Fund Facility (EFF).

“Following discussions between IMF staff and the Pakistani authorities in Islamabad from February 3-13, which continued from the IMF headquarters in recent days, IMF staff and the Pakistani authorities have reached a staff-level agreement on policies and reforms needed to complete the second review of the authorities reform programme supported under the EFF,” said Ernesto Ramirez Rigo, Mission Chief for Pakistan.

In the statement received here on Thursday on the second review of the EFF, Rigo said the agreement was subject to approval by the IMF management and consideration by the Executive Board, which was expected in early April. Completion of the review would enable disbursement of SDR (Special Drawing Right) 328 million (around US$450 million), Rigo added.

It is pertinent to mention here that at the conclusion of staff level visit on February 13, the IMF mission had expressed satisfaction with the progress made during the last few months in advancing reforms and continuing with sound economic policies.

In a statement issued at the end of the visit, Rigo had said all end-December performance criteria were met, and structural benchmarks had been completed. He elaborated the IMF staff team had constructive and productive discussions with the Pakistani authorities and commended them on the considerable progress made during the last few months in advancing reforms and continuing with sound economic policies.

“The mission and the authorities made significant progress in the discussions on policies and reforms while in the coming days, progress would continue to pave the way for the IMF Executive Board’s consideration of the review.

“The macroeconomic outlook remains broadly as expected at the time of the first review while the economic activity has stabilised and remains on the path of gradual recovery,” the statement at the conclusion of the visit said.

“The current account deficit had declined, helped by the real exchange rate that is now broadly in line with fundamentals, international reserves continue to rebuild at a pace considerably faster than anticipated.”