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IMF approves the release of pending bailout funds that are crucial for Pakistan to resolve an acute balance of payments crisis, according to the IMF spokeswoman.
Sources have said that the IMF’s focus is now more on ensuring that Pakistan does not default by arranging funds to the extent of the external debt repayments. It is no longer emphasising on increasing the extremely low foreign exchange reserves.
Dar also said on Thursday that Pakistan would not default on any foreign liability, with or without an IMF programme. He said Pakistan had fulfilled all the prior actions of the IMF and it was now up to the lender to sign the agreement.
The finance minister argued that the delay in the IMF deal should not be linked to default.
“Pakistan will not default whether there is an IMF programme or no programme,” he asserted. He went on to say that additional tough decisions could not be taken at this stage.
Dar said that suspicions were being created as if to say that Pakistan is going to default on its international payments. He said an international rating agency talked about Pakistan’s $3.7 billion external payments due before June 30 and when he responded to the situation with a clarification, another rating agency came up with an assertion the next day that Pakistan would not be able to meet its foreign obligations from July to December.
The foreign exchange reserves held by the State Bank of Pakistan have fallen to $4.4billion.
The government has been trying to avoid default by putting the brakes on imports, as its debt-related financial inflows have almost dried up due to a delay in reaching a deal with the IMF.
Sources say that the government is also not inclined in meeting the IMF’s demand of sharing a draft of the next year’s budget. Senior officials from the finance ministry said that the draft budget can only be shared if the IMF is willing to merge the 10th review and give more than $1.2 billion financing tranche.
Of the $6.5 billion, $2.6 billion still remain undisbursed despite a nine-month extension in the IMF programme.
Sources have said that the IMF’s focus is now more on ensuring that Pakistan does not default by arranging funds to the extent of the external debt repayments. It is no longer emphasising on increasing the extremely low foreign exchange reserves.
Dar also said on Thursday that Pakistan would not default on any foreign liability, with or without an IMF programme. He said Pakistan had fulfilled all the prior actions of the IMF and it was now up to the lender to sign the agreement.
The finance minister argued that the delay in the IMF deal should not be linked to default.
“Pakistan will not default whether there is an IMF programme or no programme,” he asserted. He went on to say that additional tough decisions could not be taken at this stage.
Dar said that suspicions were being created as if to say that Pakistan is going to default on its international payments. He said an international rating agency talked about Pakistan’s $3.7 billion external payments due before June 30 and when he responded to the situation with a clarification, another rating agency came up with an assertion the next day that Pakistan would not be able to meet its foreign obligations from July to December.
The foreign exchange reserves held by the State Bank of Pakistan have fallen to $4.4billion.
The government has been trying to avoid default by putting the brakes on imports, as its debt-related financial inflows have almost dried up due to a delay in reaching a deal with the IMF.
Sources say that the government is also not inclined in meeting the IMF’s demand of sharing a draft of the next year’s budget. Senior officials from the finance ministry said that the draft budget can only be shared if the IMF is willing to merge the 10th review and give more than $1.2 billion financing tranche.
Of the $6.5 billion, $2.6 billion still remain undisbursed despite a nine-month extension in the IMF programme.
