Negotiation between IMF and Pakistan have been completed with assuring Fund’s implement policies

Islamabad: (Web Desk) The IMF mission head has said that the negotiations between International Monetary Fund and Pakistan have been completed with the latter assuring the Fund that it will implement policies needed to safeguard macroeconomic stability.

According to the sources, an International Monetary Fund mission led by Mr. Nathan Porter visited Islamabad during January 31 to February 9 to hold discussions under the ninth review of the authorities’ program supported by the IMF Extended Fund Facility (EFF) arrangement.

Mr. Porter issued statements yesterday at the end of the visit:

As per details the IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions. Considerable progress was made during the mission on policy measures to address domestic and external imbalances.

Furthermore key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.

Moreover the timely and decisive implementation of these policies along with resolute financial support from official partners is critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development. Virtual discussions will continue in the coming days to finalize the implementation details of these policies. The government said yesterday it had agreed on a set of prior actions with the IMF to complete the ninth review of the troubled $7bn Extended Fund Facility (EFF).

Meanwhile “the IMF has asked for more time for negotiations with Pakistan over a deal that would unlock $1.1 billion in much-needed funds for the country, Secretary of Finance Hamed Sheikh said yesterday.” He added that “The staff level agreement between Pakistan and IMF will be reached soon. The IMF mission asked for more time for staff-level negotiations. He said both sides had agreed on “actions and advance measures. The staff-level talks were due to conclude on Thursday.”

However, he declined to say how many and what prior actions had been agreed upon, saying all these details would follow. Sheikh said that unfortunately, the finance minister would not be able to speak to the media because the Fund’s mission was of the view that there should be no discussion before the concluding statement is Okayed by Washington.

According to the sources, “They are waiting for it and we are also waiting. They are pursuing,” he said, adding that the government could only talk to journalists once the concluding statement is issued by the IMF. Responding to a question, he made it clear that the SLA would be reached subsequently and also confirmed that the draft Memorandum of Economic and Financial Policies (MEFP) had not yet been shared with Pakistan by the Fund mission.

As per details, he said the government team insisted the delegation should issue a customary end-of-mission statement and share the MEFP as everything had been settled after extensive discussions. The MEFP is a key document that describes all the conditions, steps and policy measures on the basis of which the two sides declare the staff-level agreement.