Negotiations underway with IMF, says finance ministry

Pakistan’s ministry of finance once again looked to calm nerves amid reports that talks with the International Monetary Fund (IMF) have remained inconclusive, stressing that negotiations over the $6-billion extended loan facility remain underway.

“It is not correct to report failure during the ongoing negotiations,” tweeted newly-appointed finance ministry spokesperson Muzzammil Aslam, adding that a statement will be issued as soon as the talks are completed.

Reports regarding the IMF-government negotiations ending inconclusively have started to make the rounds again.

The reports suggest that Advisor to Prime Minister on Finance and Revenue Shaukat Tarin left Washington DC without concluding the talks, while the last member of the Pakistani delegation, Finance Secretary Yousaf Khan, also left the US capital city without securing an arrangement.

A high-level Pakistan delegation left for the US a week ago to attend the IMF and World Bank annual meetings with talks regarding the $6-billion Extended Fund Facility to take place on the sidelines as well.

Days ago, State Bank of Pakistan (SBP) Governor Dr Reza Baqir also said that the public will hear good news soon regarding the agreement, a statement which followed that of an IMF official who said talks between the two were moving in a “progressive manner”.

On Tuesday, Jihad Azour, Director, Middle East, and Central Asia Department, while talking on the official IMF YouTube channel, said talks with Pakistan have progressed, and the IMF mission is reviewing various details.

“The IMF mission to Pakistan and the authorities are currently in the process of the discussion around the sixth review of the programme, and discussions are progressing around the various pillars and the measures that the Government of Pakistan is currently contemplating,” said Azour.

“The progress has gone in a very good step and the mission is going through the various details,” he added.

Pakistan’s ministry of finance has previously also refuted media reports regarding IMF talks ending inconclusively. The ministry had said talks were ongoing, and a final decision would be announced in the coming days.

Pakistan and the IMF have been in negotiations for the resumption of the EFF. Contingent on successful negotiations, the IMF would release a $1-billion tranche to Pakistan.

The billion-dollar inflow is crucial for Pakistan that struggles with its balance-of-payments situation. Its widening current account deficit has already put a severe strain on the currency, which has lost nearly 12.5% in the last five months.

The country’s foreign exchange reserves also declined on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

On October 15, the foreign currency reserves held by the SBP were recorded at $17,492.2 million, down a massive $1.65 billion compared with $19,138.4 million on October 8.

The central bank said the decrease was mainly due to external debt repayment that included repayment of $1,000 million against Pakistan International Sukuk.