- Pakistan, the IMF have agreed, in principle, to extend the stalled bailout program for up to one year.
- They agreed to increase the loan amount to $8 billion, giving markets much-needed stability.
- The loan amount would increase from the existing $6 billion to $8 billion.
Pakistan and the International Monetary Fund (IMF) have agreed, in principle, to extend the stalled bailout program for up to a year and increase the loan amount to $8 billion, giving markets the stability they need. much-needed respite for the new government, media reports.
The deal was struck between Pakistani Finance Minister Miftah Ismail and IMF Deputy Managing Director Antoinette Sayeh in Washington, sources told The Express Tribune on Sunday.
Subject to final terms, the IMF has agreed that the program will be extended by an additional nine months to one year from the original end period of September 2022, the sources added.
The loan amount would increase from the existing $6 billion to $8 billion, a net addition of $2 billion, a senior government official said on condition of anonymity.
The previous government led by the PTI and the IMF had signed a 39-month Extended Financing Facility (July 2019 to September 2022) worth a total of $6 billion. However, the previous government failed to meet its commitments and the program remained stalled most of the time, with $3 billion remaining undisbursed.
Before submitting Pakistan’s case to the IMF board for approval, Islamabad should agree on the fiscal strategy for the next financial year 2022-23, the sources said.
In addition, Prime Minister Shehbaz Sharif’s government is expected to demonstrate that it would reverse some erroneous measures taken by the former regime against commitments it made before the IMF board in January this year.
Pakistan is going through a phase of political and economic uncertainty and the decision to stay in the IMF program longer than the initial period would bring clarity in economic policies and calm restless markets, Express Tribune reported.
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