The International Monetary Fund, or IMF, has said it has reached an agreement with the Pakistani authorities on the "policies and reforms" needed to review the second $ 6 billion loan approved for the fragile economy of the battered country to complete, it says in a media report Friday.
In July last year, the International Monetary Fund (IMF) Board of Directors approved a $ 6 billion USD 39 billion agreement to support its economic reform program under the Extended Fund Facility (EFF) for Pakistan.
The Pakistani Ministry of Finance contacted the IMF in August 2018 to receive a bailout package when the government took over Imran Khan.
"IMF staff and the Pakistani authorities have reached a staff level agreement on strategies and reforms needed to complete the second review of the EFF-backed government reform program," the Pakistani newspaper Dawn quoted the IMF's head of mission for Pakistan , Ernesto Ramirez Rigo.
The announcement was made by Mr. Rigo following a brief statement following a series of talks with the Pakistani Prime Minister of Finance and Revenue Advisor Hafeez Shaikh, Pakistani State Bank Governor Reza Baqir and Finance Minister Naveed Kamran Baloch at a video conference last year two Weeks, the report said.
The agreement is subject to IMF management approval and board review, which is expected in early April.
Completion of the review will allow a payout of approximately $ 450 million, the IMF said.
The Pakistani authorities disagreed on the "policies and reforms needed to complete the second review", but indicated that both sides agreed that some breathing space was required to absorb previous shocks before Further adjustments that were higher than estimated inflation put unexpected pressure on the majority of people, the report said.
An official said it was also hoped that a continued easing in oil prices would create room for adjustment, part of which could become part of next year's budget.
He said full disclosure of agreed policies could be "market sensitive" and should be left for a reasonable amount of time.
Typically, details of reviews of programs supported by the IMF are released after the reviews are approved by the fund's board of directors and employee reports are released. The board meeting due in early March has now been postponed by one month to early April.
After the staff-level discussions ended in Islamabad between February 3 and 13, the IMF mission had reported significant progress in the further development of reforms and the continuation of sound economic policies in recent months.
"All performance criteria from late December were met and structural benchmarks were completed," said the fund. The steady progress in program implementation would pave the way for the review of the review by the IMF board.
Pakistan reached agreement on the bailout package with the IMF after the marathon talks last June.
The $ 6 billion grant includes an immediate $ 1 billion disbursement to help Pakistan overcome its balance of payments crisis.
Prime Minister Imran Khan had criticized the entire business team including the Treasury Secretary, the Head of the State Bank of Pakistan (SBP) and the head of the Federal Bureau of Revenue (FBR) for failing to improve the economy.
The latest agreement is the 22nd bailout package since Pakistan became a member of the IMF in 1950.
Pakistan has received billions of aid packages from countries such as China, Saudi Arabia and the United Arab Emirates.
Last year, Pakistan received a $ 3 billion bailout package from oil-rich Qatar.
Previously, China provided $ 4.6 billion in deposits and commercial loans, and Saudi Arabia provided $ 3 billion in cash deposits and $ 3.2 billion in oil facilities for deferred payments. The United Arab Emirates also provided a cash deposit of $ 2 billion.