Islamabad February 9 2023: Pakistan authorities reached consensus needed for reaching much needed Staff Level Agreement with IMF mission for completion of ninth review but failed to reach Staff Level Agreement today, necessary for reducing uncertainty and unlocking multilateral and bilateral inflows.
According to the sources, Prime Minister Shehbaz Sharif was briefed by the IMF delegation about the negotiations with Pakistan.
“Pakistan and IMF agreed on all agenda items. IMF mission will issue the statement after its approval from Washington” says secretary finance Hamed Yaqoob Sheikh. IMF team will leave early tomorrow he confirmed.
The IMF discussed the draft of the Memorandum for Economic and Financial Policies just before the end of the scheduled review talks, leaving no room for the staff level agreement on the same day.
Sources say that the Prime Minister has given approval to settle matters with the IMF.
Completion of the ninth review will make the country eligible for tranche of US$1.2 billion and also help the country to get additional commitments from friendly countries and Multilateral creditors.
State Bank of Pakistan believes that the completion of the pending 9th review under the IMF’s EFF is critical for reducing uncertainty and unlocking multilateral and bilateral inflows. The benefit of an 18.2 percent fall in imports was partially offset by declines in export receipts and remittances. Notwithstanding the reduction in the current account deficit, the external sector remains under stress due to delay in realization of official financial inflows, debt repayments and ongoing political uncertainty.
The EFF was approved by the Executive Board on July 3, 2019 (see Press Release No. 19/264 ) for SDR 4,268 million (about US$6 billion at the time of approval, or 210 percent of quota). In order to support program implementation and meet the higher financing needs in FY23, as well as catalyze additional financing, the IMF Board approved an extension of the EFF until end-June 2023, rephasing and augmentation of access by SDR 720 million that will bring the total access under the EFF to about US$6.5 billion.
