Pakistan expects IMF loan approval after meeting all conditions

ISLAMABAD: Pakistan has met all conditions required by the International Monetary Fund (IMF), removing any hurdles to the approval of the next loan tranche under its bailout programme, finance ministry sources said.

The IMF Executive Board is expected to meet in the first week of May to consider approval of around $1.2 billion under the Extended Fund Facility (EFF) following a staff-level agreement on Pakistan’s third economic review.

Finance ministry sources said that Pakistan had fulfilled all IMF conditions and provided assurances regarding the rollover of loans from friendly countries, clearing the way for disbursement.

They said that Pakistan is also expected to receive around $210 million under the IMF’s Resilience and Sustainability Facility (RSF) programme.

The sources said that the IMF had been taken into confidence on targeted subsidies for petroleum products, and consultations were held before passing on increases in global oil prices to consumers.

They said that the targeted subsidy would be financed through the current fiscal year’s budget, while an emergency fund of Rs300 billion was available to deal with difficult conditions.

Talks are ongoing with Saudi Arabia and the United Arab Emirates to roll over deposits for a longer term, with expectations that the UAE will soon extend its support, the sources said.

Currently, Pakistan holds deposits of $5 billion from Saudi Arabia, $4 billion from China and $3 billion from the UAE with the State Bank of Pakistan, the sources said.

The sources said that $2 billion from the UAE is due this month and another $1 billion in July, but expressed confidence that repayments would be managed on time without any difficulty.