ISLAMABAD (AA) – With Pakistan’s national reserves falling to $3.7 billion, the country’s talks with the International Monetary Fund continue in the capital Islamabad.
The Pakistan government is pressing the international lender for an urgent release of $1.2 billion to enable the economy to stay afloat.
The IMF team is led by Nathan Porter, who is the Mission Chief to Pakistan. Pakistan’s team of economic managers is being led by Federal Minister for Finance and Revenue Senator Ishaq Dar.
The two sides will continue technical discussions on expenditure cuts and revenue measures following technical deliberations in the first round, which is scheduled to last until Friday, before moving on to crucial policy-level negotiations which will continue till February 9, according to local media.
The latest negotiations come as the country’s foreign exchange reserves have fallen to a nine-year low of $3.7 billion, which is insufficient to cover even three weeks of imports, according to the local Dawn newspaper. The same also reported that the government is in talks with the IMF about a bailout that would also unlock inflows from friendly countries.
In 2019, the IMF and Pakistan agreed to a $6 billion bailout, which was later topped up by an additional $1 billion. Pakistan has received $4 billion so far, with the remaining sum not yet paid due to Islamabad’s apparent failure to meet the IMF’s terms and conditions.
“There is no other option but to implement the agreed conditions and implement structural reforms in the power sector,” an official who requested anonymity told The Business Recorder newspaper.
The government must raise electricity and gas prices and levy taxes because the gap between revenue and expenditure has been increasing, said the official, who was present at the meeting.