Pakistan goes to beg IMF.

[ziaulislam]

ISLAMABAD:

The terms of the bailout package agreed with the International Monetary Fund (IMF) may be “homegrown”, but the Fund has made it a strict prerequisite that Islamabad send out notices to identified tax evaders before it can wish to obtain the $5.3 billion promised under the new programme.

In the first phase, the Federal Board of Revenue (FBR) will send out notices to 10,000 top tax dodgers within this month: this clause has been written down in black and white in the deal reached with the IMF, officials revealed to The Express Tribune. In the second phase, notices will be sent to 15,000 more tax dodgers in August. According to the condition, a total of 100,000 tax evaders will receive notices this fiscal year.

The step is aimed at broadening the extremely narrow tax base of the country, which consists largely of salaried individuals. In a population of 180 million, income tax payers number less than 800,000, according to the FBR.

In return for bailing the Pakistani economy out, the IMF wants Pakistan to increase its tax-to-GDP ratio from its historical low of 8.9%, to 9.5% in the current fiscal year.

If Pakistan fails to do so, under any compulsion, it will cost the country the $5.3 billion bailout package, sources said.

According to the deal, Pakistan is bound to implement five conditions: notifying and netting evaders as part of income tax measures is one of the things it has to do if it wishes for the IMF’s Executive Board to clear the loan. The Executive Board is scheduled to meet in the first week of September.

Other conditions include increasing electricity tariffs, making borrowing expensive by increasing interest rates, putting restraints on provincial expenditures and seeking approval for them from the Council of Common Interests.

When the deal was announced, Finance Minister Ishaq Dar had said the package was “homegrown” and in line with the PML-N’s manifesto.

 

[ziaulislam]

پاکستان کی فروخت

BBC News - Pakistan agrees $5.3bn IMF loan

Pakistan agrees $5.3bn IMF loan
International Monetary Fund (IMF) Pakistan Mission Chief Jeffrey Franks (left) is flanked by Pakistani Finance Minister Ishaq Dar (right) as he speaks during a news conference in Islamabad The IMF's Jeffrey Franks announced the loan with Pakistan's Finance Minister Ishaq Dar

Pakistan's newly elected government has agreed a $5.3bn (£3.5bn) loan with the International Monetary Fund (IMF).

The three-year loan will replenish the central bank's reserves and buy time for the government to cut its budget deficit and fix the energy sector.

Prime Minister Nawaz Sharif won elections in May in Pakistan's first democratic change of government.

Among the new government's priorities are dealing with frequent power cuts, and increasing its tax collection.

"Technical and financial problems in the energy sector have led to large-scale power outages, which have depressed output and imposed hardship on the public at large," the IMF noted in its announcement of the agreement.

As part of the deal, the government has also agreed to cut its over-spending, in part by eliminating subsidies and tax loopholes in order to increase the amount of taxes it collects.

Pakistan also agreed to raise more money through privatisation, including the sell-off of energy assets.

"We have not carried the begging bowl in our hands, nor are we getting a grant," said Finance Minister Ishaq Dar, who led the Pakistani delegation during two weeks of negotiations with the IMF.

Pakistan's last government abandoned the country's previous $11.3bn loan programme in 2011, as it found the financial reforms imposed by the IMF too demanding.

The IMF still needs to obtain approval from its executive board for the new agreement, which is expected in September.


قرض غلامی کی نشانی ہے


Once we will put enough DEBT ..

All those assets

>Riko Dig Mines Gold mines
>Coal found in Sindh
>Energy projects .....the same projects we are taking the loans for

All will be sold to international companies


SUBSIDY = GOVERNMENT INCENTIVE = TO LOWER SERVICE TO POOR
No SUBSIDY = HIGHER PRICES = MORE STRAIN ON POOR OF COUNTRY !!!

Some
GOVERNMENT ALSO RUNS SUBSIDIES ON HEALTH
GOVERNMENT ALSO RUNS SUBSIDIES ON Welfare

All IMF does is PUTS A FORMULA .. you raise PRICES .. OF ALL GOODS .. we want our payment by such and such date

privitization and economy run by people and coprate instead of govt is the key unless of course we have saints who can run those companies on profit fro us..
do you know that DESCO wastes 200 billion rupess due to oil theft and poor managment..
this is more than total education budget
this is the reason that despite having sizable econmy we are poorest in education and health
govt job is taxes,education and health not business, business will only help corruption and politicans

 

[Argus Panoptes]

@Aeronaut @nuclearpak @A.Rafay @Leader @mafiya

Please get ready for PKR 130 to the dollar in two years or so:

IMF scripts the tune - DAWN.COM

IMF scripts the tune
Khurram Husain

Updated 2013-07-06 15:11:43

IT’S the oldest script for any incoming government, and despite their best efforts to avoid using it, the new PML-N government has bowed to the inevitable.

The script always begins with the same words: “We inherited a broken economy.” Then come the string of inevitable measures, first of which is an approach to the IMF for a loan. Then come the price increases, followed by the shrill commentary in the media and the government goes on the defensive as the opposition smells blood.

It’s no different this time. Everybody knew, months ago, that an approach to the IMF would be inevitable in the early days of this government. People scratched their heads when the first intimations from those close to the party’s leadership suggested that the government would like to initially try and tackle the moment without going to the fund.

The general sense of puzzlement picked up a notch following the budget, and the announcement of a revenue target, and foreign inflows projections that seemed unrealistic. Wasn’t the budget the first opportunity for the government to demonstrate its intent, and seriousness of purpose? If so, why did they pass up the opportunity to take the bull by the horns?

Now the clouds of uncertainty have lifted, and the script has been revealed. And mandate or no mandate, it turns out the script for this government will not be very different from that of previous governments.

Very few people believe that a bad decision has been made. “It’s necessary at this point,” says Salim Raza, who served as State Bank Governor the last time when Pakistan went to the IMF. But a number of questions are raised in the wake of the accession.

“What is the secret agreement on the downward adjustment of the rupee?”, asks Dr Hafeez Pasha, who has dealt with the IMF as finance minister in the past.

With the State Bank now locked out of intervening in the currency markets to support the rupee, he argues, the rupee is going to have to slide and the size of the facility is also insufficient to cover the financing needs of the forthcoming fiscal year.

Between all the expected inflows in the coming year — from Coalition Support Fund (CSF), to auction of 3G licence to dues from PTCL privatisation to the Eurobond floatation to the China safe deposit and resumption of loans from other multilateral lenders, “we are still left with a net financing gap of $3 billion”, he says.

“Now if they give us over $3 billion from the facility in the first year, it might just put us over the hump, but the situation on the external front remains fragile because this is still the best case scenario.”

For Salim Raza, the largest risk is the size of the domestic debt. “If interest rates are going to go up, which looks likely, each percentage point increase means 85 billion rupees of additional debt service cost.”

“A lot will also depend on the timing of the removal of the subsidies,” he continues, saying the IMF will be watching progress on this front very carefully.

Shaukat Tarin, former financial adviser who oversaw the last approach to the IMF and presided over its implementation until resigning in February 2009, is a little more upbeat.

“I don’t see any stiff prior actions, the fund has been soft on Pakistan if you ask me,” he says. Bringing the deficit down should not be as hard as it seems in his opinion.

The math is simple, according to him. There’s a five-rupee difference between the average rate determined by Nepra and the rate at which electricity is sold. Even a three-rupee increase in the average tariff gives you almost Rs250 billion.

“They’ll end up spending close to 550 billion on subsidies if they don’t rationalise the tariff,” he says, arguing that this is a big threat to the fiscal framework, but also presents an excellent opportunity to stabilise things if recoveries can be improved.

Tarin served as financial adviser in a time of currency stability. Much of the devaluation in the currency had been done in days prior to accession to the facility. This time too, he says, rupee stability hinges on inflation. “If you can control inflation, you’ll have a stable currency,” he says, pointing out that the expected hikes in the power tariff will present the biggest challenges on the inflation front.

But he agrees that the days of quietly supporting the rupee through State Bank interventions in the currency markets are now over. “The fund will frown on this practice,” he says, before adding that in his opinion, the rupee is probably already overvalued.

The old script goes exactly like this. Circumstances force a new government to accede to an IMF programme. The accession is followed by “rationalisation” of key prices like power and fuel. The rupee comes under pressure, inflation rises, interest rates go up. And the incumbent government spends the rest of its time in office managing the quandary that leaves it stuck between the imperatives of stabilisation on the one hand, and the dire need to restart growth on the other.

From here on, if the new government doesn’t take swift and bold action — not mere announcements — the initiative will comprehensively pass from their hands. And it would all have happened before any money has even been disbursed, since the fund has asked for “prior actions” before they will even consider granting the loan facility to Pakistan in September.

 

[Bratva]

@Aeronaut @nuclearpak @A.Rafay @Leader @mafiya

Please get ready for PKR 130 to the dollar in two years or so:

IMF scripts the tune - DAWN.COM

IMF scripts the tune
Khurram Husain

Updated 2013-07-06 15:11:43

IT’S the oldest script for any incoming government, and despite their best efforts to avoid using it, the new PML-N government has bowed to the inevitable.

The script always begins with the same words: “We inherited a broken economy.” Then come the string of inevitable measures, first of which is an approach to the IMF for a loan. Then come the price increases, followed by the shrill commentary in the media and the government goes on the defensive as the opposition smells blood.

It’s no different this time. Everybody knew, months ago, that an approach to the IMF would be inevitable in the early days of this government. People scratched their heads when the first intimations from those close to the party’s leadership suggested that the government would like to initially try and tackle the moment without going to the fund.

The general sense of puzzlement picked up a notch following the budget, and the announcement of a revenue target, and foreign inflows projections that seemed unrealistic. Wasn’t the budget the first opportunity for the government to demonstrate its intent, and seriousness of purpose? If so, why did they pass up the opportunity to take the bull by the horns?

Now the clouds of uncertainty have lifted, and the script has been revealed. And mandate or no mandate, it turns out the script for this government will not be very different from that of previous governments.

Very few people believe that a bad decision has been made. “It’s necessary at this point,” says Salim Raza, who served as State Bank Governor the last time when Pakistan went to the IMF. But a number of questions are raised in the wake of the accession.

“What is the secret agreement on the downward adjustment of the rupee?”, asks Dr Hafeez Pasha, who has dealt with the IMF as finance minister in the past.

With the State Bank now locked out of intervening in the currency markets to support the rupee, he argues, the rupee is going to have to slide and the size of the facility is also insufficient to cover the financing needs of the forthcoming fiscal year.

Between all the expected inflows in the coming year — from Coalition Support Fund (CSF), to auction of 3G licence to dues from PTCL privatisation to the Eurobond floatation to the China safe deposit and resumption of loans from other multilateral lenders, “we are still left with a net financing gap of $3 billion”, he says.

“Now if they give us over $3 billion from the facility in the first year, it might just put us over the hump, but the situation on the external front remains fragile because this is still the best case scenario.”

For Salim Raza, the largest risk is the size of the domestic debt. “If interest rates are going to go up, which looks likely, each percentage point increase means 85 billion rupees of additional debt service cost.”

“A lot will also depend on the timing of the removal of the subsidies,” he continues, saying the IMF will be watching progress on this front very carefully.

Shaukat Tarin, former financial adviser who oversaw the last approach to the IMF and presided over its implementation until resigning in February 2009, is a little more upbeat.

“I don’t see any stiff prior actions, the fund has been soft on Pakistan if you ask me,” he says. Bringing the deficit down should not be as hard as it seems in his opinion.

The math is simple, according to him. There’s a five-rupee difference between the average rate determined by Nepra and the rate at which electricity is sold. Even a three-rupee increase in the average tariff gives you almost Rs250 billion.

“They’ll end up spending close to 550 billion on subsidies if they don’t rationalise the tariff,” he says, arguing that this is a big threat to the fiscal framework, but also presents an excellent opportunity to stabilise things if recoveries can be improved.

Tarin served as financial adviser in a time of currency stability. Much of the devaluation in the currency had been done in days prior to accession to the facility. This time too, he says, rupee stability hinges on inflation. “If you can control inflation, you’ll have a stable currency,” he says, pointing out that the expected hikes in the power tariff will present the biggest challenges on the inflation front.

But he agrees that the days of quietly supporting the rupee through State Bank interventions in the currency markets are now over. “The fund will frown on this practice,” he says, before adding that in his opinion, the rupee is probably already overvalued.

The old script goes exactly like this. Circumstances force a new government to accede to an IMF programme. The accession is followed by “rationalisation” of key prices like power and fuel. The rupee comes under pressure, inflation rises, interest rates go up. And the incumbent government spends the rest of its time in office managing the quandary that leaves it stuck between the imperatives of stabilisation on the one hand, and the dire need to restart growth on the other.

From here on, if the new government doesn’t take swift and bold action — not mere announcements — the initiative will comprehensively pass from their hands. And it would all have happened before any money has even been disbursed, since the fund has asked for “prior actions” before they will even consider granting the loan facility to Pakistan in September.

On a positive, For same value of riyal, dollar, dinar etc etc, we can get more Pakistani rupees. Couple of years back, for every 1 riyal, it was 20 rupees, now it is 26-27 rupees and soon it will be 30-32 rupees

On a negative side,,,, Sir jee,,, Anay walay halat ko sehnay kay liye tayl laga lia hay hur nazuk jaga par

 

[Leader]

Wasn’t the budget the first opportunity for the government to demonstrate its intent, and seriousness of purpose? If so, why did they pass up the opportunity to take the bull by the horns?

this is what I said time and again that atleast show some progress, atleast set aside a penny to pay the debt than to take further load to pay the interest installment on the loan.

“A lot will also depend on the timing of the removal of the subsidies,” he continues, saying the IMF will be watching progress on this front very carefully.

sure, they will be...

From here on, if the new government doesn’t take swift and bold action — not mere announcements

such as?

On a positive, For same value of riyal, dollar, dinar etc etc, we can get more Pakistani rupees. Couple of years back, for every 1 riyal, it was 20 rupees, now it is 26-27 rupees and soon it will be 30-32 rupees

On a negative side,,,, Sir jee,,, Anay walay halat ko sehnay kay liye tayl laga lia hay hur nazuk jaga par

one donkey would be working 24/7 abroad and his family who thinks money grows on trees would be spending on consumer goods exported from other countries !!

 

[RazorMC]

On a positive, For same value of riyal, dollar, dinar etc etc, we can get more Pakistani rupees. Couple of years back, for every 1 riyal, it was 20 rupees, now it is 26-27 rupees and soon it will be 30-32 rupees

On a negative side,,,, Sir jee,,, Anay walay halat ko sehnay kay liye tayl laga lia hay hur nazuk jaga par

First, Pakistan would still be getting a similar amount of remittances and dollars and our reserves would still remain critically low.

And even though the receivers in Pakistan would get more rupees for the same amount of money, the benefit would be very short-lived. A falling rupee will result in price hikes of all imported goods. The greedy distributors will take no time in increasing the prices of locally produced goods as well.

The standard of living will continure to fall along with the rupee because the net income is still the same while inflation and more taxes put more burden on families..

 

[Leader]

@Argus Panoptes @Jazzbot @RazorMC @mafiya @@Aeronaut @nuclearpak @A.Rafay

isay kehtay hain awami hakumat !

 

[Argus Panoptes]

...............
@Argus Panoptes @Jazzbot @RazorMC @mafiya @@Aeronaut @nuclearpak @A.Rafay

isay kehtay hain awami hakumat !

Sir abhi tau:

Ibtada-e-Ishq Hai Rota Hai Kya
Aage aage dekhiye hota hai kya ...

 

[Jazzbot]

Jee haan, hum ne kashkool tor dia hy, ab bheek mangne ki bajaye, hum IMF ko naach kar manate hain paise dene par..

 

[A.Rafay]

On a positive, For same value of riyal, dollar, dinar etc etc, we can get more Pakistani rupees. Couple of years back, for every 1 riyal, it was 20 rupees, now it is 26-27 rupees and soon it will be 30-32 rupees

On a negative side,,,, Sir jee,,, Anay walay halat ko sehnay kay liye tayl laga lia hay hur nazuk jaga par

I remember when we first came here in ksa the riyal was at 15-16, that was in 2003! after 10 years in 2013 it has went to 26!

 

[Bratva]

I remember when we first came here in ksa the riyal was at 15-16, that was in 2003! after 10 years in 2013 it has went to 26!

16. Remained 16 like for 3-4 years, until 2008 came and all hell break loose

 

[niaz]

An article in favour of IMF deal.



The new IMF programme

Dr Ashfaque H Khan
Tuesday, July 09, 2013
From Print Edition

The IMF mission has reached a staff-level agreement with the Pakistani authorities for a $5.3 billion bailout package. The duration of the programme is three years, and the resources will be provided to Pakistan under the Extended Fund Facility (EFF). The agreement will be reviewed by the IMF management and once it is cleared, it will be presented to the board during the first week of September 2013 subject to the timely completion of prior actions by the Pakistani authorities.

The new programme is good for Pakistan for the following reasons. In the first instance, it will remove uncertainty surrounding the country's economy. It will also help prevent a crisis of confidence and the resulting capital outflow as well as help prevent further depletion of foreign exchange reserves and pressures on the exchange rate. Additionally, the agreement will save Pakistan from defaulting on its external debt payment obligations and protect the poor and the middle class from suffering on account of this default.

I have been advising our authorities to seek IMF support since September 2011 as the writing on the wall was absolutely clear. It was simply a matter of time. The previous regime was bent upon committing financial hara-kiri, and as such it was in no mood to seek IMF assistance. I commend the efforts of Finance Minister Ishaq Dar and his team in finally reaching an agreement with the IMF for a new programme.

The critical elements of the programme include: i) broadening of tax bases and phasing out of the SROs, ii) strengthening tax administration, iii) addressing issues pertaining to fiscal decentralisation, iv) reforming the energy sector by focusing on resolution of the circular debt, prevention of electricity theft, recovery of electricity bills and support of investment in the power sector.
Other elements of the programme include restructuring and privatising the rotten PSEs including the Discos and tightening the monetary policy to control inflation and prevent capital outflows. Budget deficit target has been reduced to 6 percent of GDP instead of 6.3 percent for 2013-14. It will further be reduced to 3-4 percent of GDP by the end of the programme period. Improving investment climate and protecting the poor segment of society from the cost of adjustment through strengthening social safety nets are also critical elements of the programme.

In short, resource mobilisation through tax-base broadening, addressing issues of fiscal decentralisation, energy sector reform, investment climate improvement, fiscal deficit reduction and reducing public debt burden are some of the major objectives of the programme. Other major objectives are aimed at strengthening the financial sector, strengthening corporate governance, building foreign exchange reserves to provide stability to the exchange rate and bolstering social safety net programmes.

If these reforms are successfully implemented, Pakistan may see its economic growth approaching 7-8 percent per annum with relative macroeconomic stability in the next five years. But there are serious challenges to the implementation of the programme as well as to achieving all its performance targets.

As a result of the NFC Award, the success of the programme depends crucially on the provinces. The initiative to maintain fiscal discipline and reduce budget deficit has been shifted to the provinces as they receive 60-65 percent of the resources collected by the Federal Board of Revenue (FBR). This is what I had been stating all along since the finalisation of the new NFC Award in 2010, but the country's financial managers never paid any attention and as such fiscal indiscipline has been allowed to continue.

Realising its importance for the success of the programme, both the IMF and the Pakistani authorities have agreed to address the issue as a prior action for the programme. In other words, some binding constraints on the part of the provinces to generate targeted surplus will have to be instituted and approved by the Council of Common Interest (CCI) by early September 2013.

This will be the most challenging task for the finance minister – to bring all the four provinces to agree on the binding constraints and get the approval of the CCI. I hope the provinces agree to these binding constraints in the larger interest of the economy. Failure to this agreement is not an option. The other prior actions may include tightening of the monetary policy by raising discount rate in the range of 100-150 bps and raising the power tariff to prevent re-emergence of circular debt.

The success of the programme will also depend on the ability of the FBR to collect targeted revenues, which has been made even more challenging in the IMF programme. It is well known that the FBR is in a bad shape. Infighting among different tax groups has reached to an unprecedented level. The quality of staff, including senior staff members, has deteriorated significantly over the recent years. Economic experts seriously doubt the ability of the FBR to collect targeted revenues.

If not handled properly, the power sector has the ability to derail the programme by creating slippages on the expenditure side. The Rs150 billion allocated for inter-Disco tariff differential in the 2013-14 budget is most likely to be breached, thus creating slippages on the fiscal deficit target.

Slippages on the non-tax revenue side are high as well. The government has targeted receiving Rs120 billion through the sale of 3G licences. This revenue is not likely to be realised for two reasons. First, the existing telecom operators do not see this as a viable investment at the back of heavy increase in the tax burden of cell phone users in the budget, and further tightening of regulatory requirements.

I would urge the finance minister to discuss these issues with the CEOs of the existing telecom companies. Second, increase in taxation on the telecom industry has reduced their revenue and hence purchase of 3G licences is no longer a profitable venture.

To monitor implementation and progress towards the programme, I would recommend the finance minister to appoint a senior level officer in the Ministry of Finance to coordinate with the concerned ministries and monitor the progress.

Finally, I would also recommend the separation of tax collection and tax policy. Currently, the FBR is performing both responsibilities and, given its deteriorating state, none of the tasks is likely to be performed to satisfaction. The government may consider appointing a secretary-level officer to take care of the tax policy. This division will serve as a think tank for tax policy, work on broadening the tax base and analyse its economic implications, prepare tax-forecasting model to forecast revenues, and also work as a think tank for the National Finance Commission.

Reaching an agreement at the staff level is the first step towards an IMF programme. Meeting prior action will be the second. Successful implementation and achieving the programme targets will depend crucially on the provinces, the FBR and, most importantly, the law and order situation in the country – Karachi in particular.

The writer is principal and dean of NUST Business School, Islamabad. Email: ahkhan@nbs.edu.pk

The new IMF programme - Dr Ashfaque H Khan

 

[niaz]

Our problem is that successive governments have failed to generate domestic savings that can be reinvested in the country for GDP growth and creating more jobs. Political imperatives have always taken priority over economic realities.

A country cannot be really independent until such time that her fiscal policy decisions taken are without outside interference. As long as we remain dependent on foreign loans, whether IMF or any other source such as Saudi Arabia, our foreign as well as internal policies will continue to be dictated by the aid donors. In other words, Pakistan must learn to manage within her own resources before she can be master of her destiny

Here is a good article from Dawn.

Dominant borrower
KHURRAM HUSAIN

Published
2013-07-11 07:30:09

BENEATH all the commentary on the details and implications of the recently concluded talks with the IMF, an important analysis has gone largely unremarked, save for one insightful article.

It grows out of an analysis presented in a special section of the last quarterly report put out by the State Bank of Pakistan (SBP). Buried in Chapter 3 of the report is a special section innocuously titled ‘Macroeconomic Dynamics with a Dominant Borrower’.

The section asks this question: “With an insatiable government appetite for credit, how does the central bank contain the quantum of inflationary finance and yet ensure the private sector is able to secure adequate credit from commercial banks?”

Translation: what do you do when the government takes all the money in the banking system and digests it as part of its day-to-day spending?

The question is important because even a first-year student of economics can tell you that an economy can only grow and create jobs and alleviate poverty and arrange investment for future growth if funds are available for investors to borrow and invest.

But when the government enters the market with an “insatiable appetite” and takes all the money, leaving nothing behind for anyone else, and spends it all on paying for things like salaries of government servants and retiring the circular debt — effectively paying for yesterday’s consumption — then of course the banks will not be in a position to lend to anyone else and provide for future investment.

The authors of the section lay out the scenario in a short four-point summary of the status quo. “The policy outcome so far is not heartening: (1) despite a 450 bps [basis points] cut in the discount rate over the past 20 months, net private-sector lending remains anaemic; (2) spreads in the banking system remain high; (3) SBP financing of the fiscal deficit has increased sharply since Q3-FY13; and (4) the balance sheets of commercial banks continue to skew in favour of government paper.”

Basically they’re telling us that a malign symbiosis has emerged. All the investible capital in our economy is being eaten up by government to pay its bills, and the banks are only too happy to oblige since lending to government carries little to no risk on the face of it.

So both government and banks are satisfied with the arrangement, which is suffocating the economy and its growth prospects.

None of the stakeholders involved have any incentive to break the relationship since they’re both getting everything they want out of it: for the banks, a steady and risk-free customer and for the government a ready avenue to avoid difficult choices like taxing key constituencies who have grown far too accustomed to making their fortunes outside the tax net.

Dominant borrower - DAWN.COM

 

[Kompromat]

 

[Argus Panoptes]

I think that Dar Sahib is "demanding" that the IMF "do more", of course aankhon mein ankhein daal ker:


US to finance feasibility study of $14bn dam - DAWN.COM

..............

Mr Dar told the ambassador that the IMF management had agreed to increase bailout package to $6.5bn from $5.3bn offered by its staff mission early this month but Pakistan was insisting on increasing it to $7.3 billion to bridge the gap between external inflows and outflows.

Mr Dar said all progress on details of the programme have been positive so far and “the only pending issue that needs to be resolved was the size and tranches of the loan.”

“Even with $7.3 billion loan, Pakistan will be facing a financing gap of about $0.5 billion,” the finance minister told Mr Olson, elaborating that in case of $6.5bn offered by the IMF, the gap would go beyond $1bn and hence US support in the IMF board would be of crucial importance.
.........