© Reuters. FILE PHOTO: The International Monetary Fund logo is seen outside the headquarters building during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas
By Gibran Naiyyar Peshimam
ISLAMABAD (Reuters) – Negotiations between the International Monetary Fund and Pakistan have made important progress toward restoring the country’s bailout program, the lender’s resident representative in Islamabad told Reuters on Thursday. Wednesday.
The statement comes as the Pakistani economy is teetering on the brink of a financial crisis, with foreign exchange reserves rapidly depleting and the Pakistani rupee at a record low against the US dollar.
Esther Perez Ruiz of the IMF said: “Discussions between IMF staff and authorities on policies to enhance macroeconomic stability over the coming year continue and significant progress has been made. for the 23rd fiscal year budget,” said IMF’s Esther Perez Ruiz.
Pakistan announced a budget of 9.5 trillion Pakistani rupees ($47 billion) for 2022-23 this month aimed at underpinning a tight fiscal in a bid to convince the IMF to restart payments. much needed relief team.
However, the lender later said additional measures were needed to bring Pakistan’s budget in line with the key objectives of the IMF program.
The two sides held talks on Tuesday night on macroeconomic and fiscal goals, a Pakistani official told Reuters on condition of anonymity.
They said the talks went “well” and that Pakistan is now expected to have an initial memorandum of understanding on macroeconomic and financial goals and then a staff-level agreement. in the next few days.
Pakistan joined a 39-month $6 billion IMF program in 2019, but only half of the money has been disbursed so far as Islamabad has struggled to keep its goals on track.
The last disbursement was in February and the next after a review in March, but the government of ousted prime minister Imran Khan has introduced a cap on expensive fuel prices that make fiscal targets and the program goes astray.
Pakistan’s new government has removed the price cap, with fuel prices set to rise by up to 70% within three weeks.