IMF Executive Board approved today a three-year US$6 billion loan

[Zibago]

https://twitter.com/x/status/1146458110812405760

 

[mastaan]

Congratulations! may this be the start of a prosperous economic cycle

https://tribune.com.pk/story/2004857/2-imf-board-meets-finalise-6b-loan-pakistan/
ISLAMABAD: The Executive Board of the International Monetary Fund [IMF] will consider the approval of $6 billion loan for Pakistan today (Wednesday).

As per details, Pakistan and the IMF have already agreed on the deal at their staff level and the government claims that the IMF conditions for approval of the loan have been met and it is expected that the board will approve the loan. If approved, the IMF would expectedly release the first tranche of $500 million in the current month.

‘IMF programme aimed at reducing Pakistan’s public debt’



However, sources say that the IMF has also advised Pakistan to review the formula for collection of revenues under the National Finance Commission (NFC) award, including an increase in the share of federal government.

The IMF has also advocated integration of taxes collected by the government. The requisite conditions come as a challenge for Pakistan as its parliament would need to amend the 18th Amendment while Sindh strongly opposes any move in this regard.

Sources say that Pakistani government will also have to ensure the IMF about the rollover of financial aid promised by friendly nations. However, this would not be a big deal as the friendly countries continue to extend their support to Pakistan, said the sources, adding that there was a strong chance that the IMF would approve the loan for the country.

Pakistan has already made alternative financial arrangements for debt servicing in case the IMF approval is deferred to the next meeting.

If IMF grants approval to $6 billion loan, Pakistan will also be able to procure up to $3 billion in aid and financing from the World Bank and the Asian Development Bank (ADB) to help control its financial crisis.

 

[Wikki019]

We hope this will be the last one

 

[VCheng]

https://twitter.com/x/status/1146458110812405760

May be it will be 13th time lucky for economic reforms.

 

[Zibago]

May be it will be 13th time lucky for economic reforms.

Well they are half way there hope they dont mess up for cheap popularity

 

[VCheng]

Well they are half way there hope they dont mess up for cheap popularity

As I say, let's wait and see how the rest of the term goes.

 

[Syed1.]

Hopefully the last IMF program ever...


I will be in favour of all parties sitting together and drafting a charter of economy so no party can come in and completely ruin all the hard work being done by the PTI government at the moment.

 

[Sine Nomine]

@Nilgiri what would be pros & cons of converting that into Gold and keeping it with Govt and just focusing on clipping measures for sorting out economy?

I will be in favour of all parties sitting together and drafting a charter of economy so no party can come in and completely ruin all the hard work being done by the PTI government at the moment.

They won't.

Well they are half way there hope they dont mess up for cheap popularity

Better for them to just keep this money safe and pay attention on bringing legislation to curb rampant corruption.

 

[Nilgiri]

@Nilgiri what would be pros & cons of converting that into Gold and keeping it with Govt and just focusing on clipping measures for sorting out economy?


They won't.


Better for them to just keep this money safe and pay attention on bringing legislation to curb rampant corruption.

Well Pak govt wants this for immediate liquidity for its federal budget.

I am assuming something like 3 billion insertion this year, 2 billion next year and 1 billion the 3rd year. Or maybe its 2 billion each year?

Also do you know if there is a number by pak govt as to how the split will be between federal and province level budgeting? Will this be like 100 - 0 (full PTI control) or like 75-25 or 50 - 50 in that (and PMLN and PPP have more say relatively speaking coz they run punjab and sindh respectively etc)?

Turning into gold just would mean it gets converted to forex immediately and PKR would again be propped up artificially by that somewhat. Essentially pak economy would signal its doing well and can just "save" like that. I mean there would be no reason to even go to IMF for that in first place, since Pakistan could just issue bonds itself to world market (esp its non-resident pak expats) and convert the forex it gets that way into gold if it wanted to (or leave as is - not much difference)....if the demand for PKR and supply of forex was genuinely there in world market itself.

But it is not, and has not been for some time now......hence why IMF is approached...who can cut you a deal (since they are institutional with some proposed mandate above pure market forces) that the market won't (given market is not institutional, just default and is dispersed in many millions of competing and cooperating and neutral hands of all sizes and makes).

Thus the strategy as I understand it is to ease structurally into better information flow/signalling for Pakistan economy w.r.t outside world liquidity. Thus the IMF injection have to be simultaneously met with reforms (and IMF conditions are based around these) to do that. Essentially they involve better transmission/transparency (to outside world) of demand/supply of Pakistan economy...so Pakistan govt/elite/oligarchs spend/extract more within the means of larger "common man" Pak economy (which does not get much representation on the world liquidity market, which is common trend to all developing countries...just degree differs). The long term aim would be to make more credible and resilient institutions within Pakistan that are "above" politics/elitism and other emotional shenanigans for some extra temporary power and control than the larger population (and larger world market) trusts in you.

@Oscar @That Guy @Dubious @waz @H!TchHiker @ziaulislam @VCheng @farhan_9909 @Cookie Monster @Arsalan

 

[Dubious]

Hopefully the last IMF program ever...


I will be in favour of all parties sitting together and drafting a charter of economy so no party can come in and completely ruin all the hard work being done by the PTI government at the moment.

I would start with in coming money in national kitty and out going money in national kitty...If the difference is abt 5% loss...that party needs to be automatically banned

75-25 or 50 - 50 in that (and PMLN and PPP have more say relatively speaking coz they run punjab and sindh respectively etc)?

At least know the basics before commenting

@Nilgiri what would be pros & cons of converting that into Gold and keeping it with Govt and just focusing on clipping measures for sorting out economy?

Poocha b kisnay

 

[MilSpec]

Congrats; hopefully, this helps in stabilizing the economy.

 

[HammerHead081]

At least know the basics before commenting

Rude. Should be given negative rating.

 

[Nilgiri]

At least know the basics before commenting

I put question marks for reason, but my bad. Traditionally punjab is run by PML right?, and they would have large sway still I would think.

Rude. Should be given negative rating.

Huh?

 

[mastaan]

It will be interesting on how the austerity push by IMF (which they will) will impact the daily lives of people.

Anyone has any clue on what conditions it finally settled.. Some posters had compared the previous govt vs this govt.. but the final summary was never printed.. won't the govt have to disclose it to parliament or something? Will be interesting to see.. 3 year sovereign loan at 10% plus is a pretty blunt instrument if this is to follow a bullet repayment, for example.

I would start with in coming money in national kitty and out going money in national kitty...If the difference is abt 5% loss...that party needs to be automatically banned

If that is how political parties were to be judged.. you won't have many left to participate in elections... And a 5% deficit is a big number - I think Pakistan is at 6,2%

 

[AZ1]

$6 billion and here we made orange train in $4 billion. Idiot pmln just want to make lahore paris by scarificing whole Pakistan. We have so many restriction from IMF just to avail $6 billion.