The government of Pakistan has stated that it is moving along well with the International Monetary Fund (IMF) and anticipates receiving board approval for a fresh $7 billion loan package in September.
“We are making positive strides with the IMF for Board approval in September,” Reuters received a text message from Finance Minister Muhammad Aurangzeb on Wednesday.
The federal minister’s comments coincide with the nation’s inability to sign a Letter of Intent (LoI) formally requesting that the executive board of the Washington-based lender consider approving $7 billion under the Extended Fund Facility (EFF) program.
A day earlier, a story in local media said that although five weeks have passed since a staff-level agreement under a new EFF rescue package was reached, the nation still has not received confirmation of an external financial deficit estimated to be between $3 and $5 billion.
On behalf of the government, the finance minister and governor of the State Bank of Pakistan (BSP), Jameel Ahmad, are expected to sign the letter of intent (LoI). The pledge will then be sent to the executive board of the IMF along with a request for approval of $7 billion under the 37-month EFF program.
It should be mentioned that on July 12, 2024, Pakistan and the IMF reached a staff-level agreement over the 37-month loan program. Pakistan anticipated that its proposal would be reviewed for approval by the IMF’s executive board within four to six weeks.
According to the IMF, getting “timely verification of necessary financing assurances from Pakistan’s economic growth and bilateral partners” and the executive board’s approval were the only requirements for the program.
Aurangzeb stated in July that Pakistan is in discussions with China, Saudi Arabia, and the United Arab Emirates (UAE) to cover its gross funding needs under the IMF program. This came after Aurangzeb visited China to pursue debt reprofiling for the energy industry.
