IMF imposes new condition for Pakistan’s financial bailout: Economy crisis
The Pakistani government has proposed multiple measures in its pursuit of an IMF bailout. According to the country’s finance ministry, the Industrial and Commercial Bank of China Ltd (ICBC) will provide a loan of $1.3 billion.
Pakistan’s economy, already facing a crisis, has been dealt another blow as the International Monetary Fund (IMF) imposed a new condition for a vital financial bailout. The IMF has demanded that Pakistan provide assurance that its balance of payments deficit is fully funded for the current financial year ending in June, according to the agency’s resident representative as cited by Reuters. The IMF has stipulated that meeting this condition is essential for Pakistan to resume the stalled IMF program and access the next installment of urgently needed funding. The potential IMF bailout is crucial for Pakistan’s economy, which is struggling with a balance of payments crisis, with foreign exchange reserves at critically low levels that can only cover four weeks of imports.
Pakistan suspends most imports as foreign exchange reserves reach critical low levels amid tough IMF conditions
IMF sets tough conditions for Pakistan
IMF Negotiates Release of $1.1 Billion for Pakistan Bailout Agreement
The Pakistan government has been in discussions with the International Monetary Fund (IMF) since February to complete its ninth review, which, if approved by the IMF board, will provide $1.1 billion in funding as part of a $6.5 billion bailout agreement. The bailout agreement is set to conclude at the end of the current financial year on June 30. Last week, Pakistan’s Finance Minister Ishaq Dar had claimed that external financing assurance was not included in the list of IMF conditions.
IMF sets condition for Pakistan bailout, including assurance on balance of payments deficit
Pakistan has reportedly completed most of the conditions set by the International Monetary Fund (IMF) for its bailout package, except for an assurance on external financing. IMF official Esther Perez Ruiz stated that “All IMF program reviews require firm and credible assurances that there is sufficient financing to ensure that the borrowing member’s balance of payments is fully financed…over the remainder of the program.” Pakistan’s government has implemented measures such as raising policy interest rates and reducing expenses in its bid for the IMF bailout. The Industrial and Commercial Bank of China Ltd (ICBC) has also agreed to provide a loan of $1.3 billion to boost the country’s foreign exchange reserves. The IMF bailout, if approved by the IMF board, will provide $1.1 billion and is part of a $6.5 billion agreement that ends on June 30.