Cash-strapped Pak close to ink deal with IMF, says finance minister

Cash-strapped Pakistan's Finance Minister Asad Umar said on Monday said that Islamabad was close to striking a deal to secure financial support from the IMF following Prime Minister Imran Khan's meeting with the global lender's chief Christine Lagarde in Dubai.

Pakistan's close ally the UAE has offered USD 3 billion to support its fragile economy. Saudi Arabia committed USD 6 billion to Pakistan as part of a bailout package to help shore up Islamabad's dwindling foreign currency reserves. Pakistan also reportedly received financial assistance from China.

Addressing the Sarhad Chamber of Commerce and Industries in Peshawar, Umar said a deal with the IMF looks imminent and that there was a convergence of views between the two parties on the need to implement structural reforms in the country, reiterating Khan's remarks in the aftermath of the meeting Sunday, Geo TV reported.

 

"There has been a decrease in the difference we had with the IMF. The IMF has changed its position... It seems we have come closer to an agreement with the IMF. Insha'Allah (God willing) this will be the last agreement. This will happen when businesses grow," he was quoted as saying by the channel.

He stressed that Pakistan's economy would be lifted by its people, not by anyone coming from the outside. "If we take the right decisions the economy would rise. It is the responsibility of the business and trading community to put Pakistan on the path towards progress."

"Prime Minister Khan told the IMF that 'we want to sign on the package'," Umar added.

Khan met Lagarde in Dubai on Sunday on the sidelines of the 7th edition of the World Government Summit and discussed the conditions of the bailout package for his cash-strapped country.

After the meeting, Lagarde said that the global lender stands ready to support Pakistan.

Khan also tweeted about his meeting with Lagarde.

"There was a convergence of our views on the need to carry out deep structural reforms to put the country on the path of sustainable development in which the most vulnerable segments of society are protected," he said.

Although the government has secured a breathing space from Saudi Arabian and the UAE loans, an IMF programme is essential to unlock access to resources from other multilateral lenders like the World Bank and the Asian Development Bank, as well as the global capital markets.

Officials have said that Pakistan would seek around USD 8 billion from the IMF which would be the biggest package by the Fund for Islamabad.

A team from the IMF visited Pakistan in November to discuss the bailout with officials, though the talks ended without agreement, but since then the government official said talks were still ongoing on a possible bailout.