Islamabad (November 07, 2018): Pakistan briefed International Monetary Fund (IMF) over the country’s economic policies in the first round of talks regarding the 13th bailout program to buoy its foreign exchange reserves that have sagged 42 per cent since January.
The second round of talks will be held tomorrow and the policy talks will get start from Monday in which IMF will review Pakistan economic policies and the loans taken in the past.
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The size of the IMF program will be determined after finalising package from China as Pakistan’s high powered technical team led by Secretary Finance Arif Ahmed Khan and Governor SBP Tariq Bajwa is scheduled to visit Beijing from November 9, 2018, for finalising package for a balance of payment support.
Pakistan is in need of an estimated $12 billion to support its external account sector for the current fiscal year of 2018/19. The country’s foreign reserves have plummeted 42 percent since January to around eight billion dollars, barely sufficient to cover two months of imports.
“The initial three to four days (of the IMF talks) are for technical discussions,” Finance Ministry spokesman Noor Ahmed informed. “Thereafter, there will be policy dialogue on the specific contents of the program.”
Pakistan last month announced a $6 billion assistance package from Saudi Arabia, split into $3 billion in foreign currency support and a further loan worth $3 billion in deferred payments for oil.
Officials said Pakistan and the IMF mission will evolve agreement on the memorandum of economic and financial policies and then sign of letter of intent to secure a 36-month extended fund facility loan. The country ended its three years $6.6 billion programs in September 2016.
Officials said both sides will have to reconcile macroeconomic and policy framework, legal language, attached conditions and many other complex subjects and work out exact financing gap during the program period and possible size of funding.
The first round of talks will be done to work out technical details during the first 10 days and in case of agreement on broader macroeconomic and fiscal framework with minute details the policy level talks will begin for three to five days in which the size of the IMF program and conditions will be negotiated with the Pakistani team.
Minister for Finance Asad Umar will lead Pakistani side during the policy level talks.
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