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Business News/ News / World/  IMF seeks more financial vows from Pak; PM says ‘all fulfilled, no excuse now’
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IMF seeks more financial vows from Pak; PM says ‘all fulfilled, no excuse now’

Pakistan's government has made various economic modifications including hikes in fuel prices, raising taxes, and others demanded by the financial body for loans.

Pakistan's Prime Minister Shehbaz Sharif. Premium
Pakistan's Prime Minister Shehbaz Sharif.

The International Monetary Fund (IMF) and crisis-hit Pakistan are locked in a debate over an unfinished loan program required for the ongoing financial collapse. Both have been negotiating since early February on an agreement that would release USD 1.1 billion to the cash-strapped, nuclear-armed country of 220 million people, and it's supercritical for the liquidity-challenged country.

The Pakistani government has made various economic modifications including hikes in fuel prices, raising taxes, and others demanded by the financial body for loans. The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019 -- vital to Pakistan to avert defaulting on external payment obligations.

The United Arab Emirates recently confirmed financial support of $1 billion to Pakistan on Friday, removing yet another hurdle before the cash-strapped nation can secure funds from the IMF.

However, the Washington-based financial body is still seeking further assurances to ensure Pakistan has fulfilled the condition of arranging the $6 billion financing to reach a staff-level agreement, according to a report published by Geo News. 

Nathan Porter, the IMF’s Mission Chief to Pakistan said that there was an agreement on the need to maintain strong financial policies and secure sufficient financing during the meeting between the Pakistani delegation and IMF staff. 

He added that the IMF looks forward to obtaining important financing assurances as soon as possible to unlock the bailout package. 

It is pertinent to note that IMF has asked Pakistan to arrange $6 billion in external financing to avoid default, but Dar urged the financial body to cut down the amount to $5 billion due to improvement in the current account deficit. However, the IMF reduced to accepting Pakistan's request, Geo News reported.

So far, Saudi Arabia confirmed $2 billion in funds to Pakistan, while UAE has committed $1 billion which reduces the now required amount to $3 billion.

Responding to IMF's recent remarks, Pakistan Prime Minister Shehbaz Sharif emphasized that the country has now met all ‘tough’ conditions laid forth by the financial body and now it has ‘no excuse’ to delay the state-level agreement. 

“Pakistan was not created to run on debts and act like beggars because their forefathers and different generations had given sacrifices for the motherland," PM Shehbaz said as quoted by Geo News.

He accepted that cash-strapped Pakistan had no choice but to accept all strict conditions laid forth by the lender to secure a much-awaited bailout tranche. The country has signed a $6.5 billion bailout package with IMF in 2019, so far, $3 billion has been released. 

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Published: 16 Apr 2023, 10:38 AM IST
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