Pakistan’s negotiations with the International Monetary Fund (IMF) are on a verge of a major breakthrough as the country’s government struggles to meet the tough demands for revival of its $6 billion Extended Fund Facility (EFF) programme.
As Pakistan is putting efforts to tackle the budgetary differences, Islamabad is hopeful of getting a breakthrough and consensus within the next 72 hours.
In an effort to comply with the IMF’s demands, the Pakistan government has already taken some tough major decisions including a massive increase in petroleum prices, which have been increased by at least 130 PKR, ending the fuel subsidies, while an increase of about 45 per cent in per unit charge of electricity and gas.
However, despite the unprecedented increase, the IMF is still insisting on doing more, especially on account of the foreign currency reserves.
Pakistan is desperate to revive the IMF programme as the country’s economy and its currency value is on a free all against the US dollar with stock market reacting aggressively to the ongoing uncertain but looming dark clouds of a visible economic meltdown of the country.
“IMF staff had not yet shared the first draft of the Memorandum of Financial and Economic Policies (MFEP) with the Pakistani authorities. However, another meeting between Pakistan and IMF is also scheduled for Saturday for moving towards the desired objectives,” said an informed official.
Sharing of the draft MFEP is a prerequisite for moving towards signing of the staff level agreement, as it requires review and mutual agreement from both sides.
“There was positive progress in a virtual meeting between Pakistan’s Finance Minister Miftah Ismail and Director IMF, held on Friday evening. Both sides made positive progress for evolving a consensus on MFEP.
“Without broader agreement on the basis of framework, no one could help Pakistan,” the source added while talking about recent meeting of Pakistan’s Minister of Finance and Minister of State for Finance with the US Ambassador in Islamabad.
The source said that influence of the US and the European Union could be sought after a consensus on exact parity of exchange rate would be reached.
Pakistan’s Finance Minister has already detailed the country’s desperate financial situation, stating that IMF programme revival was pivotal to rescue the country’s economy from bankruptcy.
The government is under immense pressure from the IMF and ousted premier Imran Khan, who is demanding immediate elections in the country.