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Govt has received draft MEFP from IMF, confirms Dar
Tahir Sherani | Dawn.com Published February 10, 2023 Updated 4 minutes ago
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Finance Minister Ishaq Dar addresses a press conference in Islamabad on Monday. — DawnNewsTV
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Finance Minister Ishaq Dar said on Friday that the government had received the Memorandum of Economic and Financial Policies (MEFP) from the International Monetary Fund (IMF) related to the completion of the ninth review of a $7 billion loan programme.
“We insisted that they (the Fund delegation) give us the MEFP before leaving so we could look at it over the weekend,” he said, adding that the government and Fund officials would hold a virtual meeting in this regard on Monday.
“I am confirming that the MEFP draft has been received by us at 9am today,” he added.
The finance minister shared the details at a press conference in Islamabad, shortly after a concluding statement issued by IMF Mission Chief Nathan Porter said that virtual talks would continue between the two sides in the coming days to finalise the implementation of key priorities.
The IMF and the government held talks between January 31 and February 9. As the visiting delegation left without a concluding statement, there was some confusion about the outcome of the talks and whether a draft MEFP had been shared.
However, Dar insisted in his press conference today that there was no confusion. “We will completely go through the [MEFP] over the weekend and will hold a meeting with [Fund officials]. It will obviously take a few days,” he said.
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.
Once the draft MEFP has been shared, the two sides discuss the policy measures outlined in the document. Once these are finalised, a staff-level agreement is signed, which is then forwarded to the Fund’s Executive Board for approval.
During his presser today, the finance minister vowed to keep making efforts to ensure Pakistan completed an IMF programme for the second time.
IMF statement
The concluding statement issued by IMF Mission Chief Nathan Porter stated, “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,” the statement said.
The statement underlined key priorities that 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.
“The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development,” the statement added.
It further said that virtual discussions would be held in the coming days to finalise the implementation of these policies.
Pakistan’s foreign exchange reserves fell to $2.916bn during the week ending on Feb 3. Experts believe that the country’s reserves are enough for only 16 or 17 days of imports.
In such a situation, the country urgently needs to complete the ninth review to unlock the disbursement of $1.2bn from the IMF and inflows from friendly countries and other multilateral lenders.
