Pakistan Expects IMF Agreement in Few Days After Multiple Delays

Pakistan expects to reach an agreement with the International Monetary Fund to resume its $6.5 billion loan program in the next few days, Finance Minister Ishaq Dar said on Thursday, after the nation failed to meet multiple such deadlines in the past.

(Bloomberg) — Pakistan expects to reach an agreement with the International Monetary Fund to resume its $6.5 billion loan program in the next few days, Finance Minister Ishaq Dar said on Thursday, after the nation failed to meet multiple such deadlines in the past.

Pakistan plans to complete the IMF program that ends in June but a serious trust deficit has emerged after previous authorities reversed agreed terms, Dar said at an event in Islamabad, said Dar.

The South Asian nation is relying on funds from the multilateral lender to avoid a loan default and revive its $350 billion economy. The funds will be crucial to ease widespread shortages, curb record prices and bolster foreign-currency reserves that have fallen to less than a month’s worth of imports.

To win the lenders support, Pakistan has increased taxes, raised energy prices and increased interest rates to 20%, the highest in 25 years. The nation also allowed its currency to depreciate making it among the worst performers globally.

Amid a dollar crunch, investors have raised concerns on the nation’s ability to make good on its payment obligations. The nation needs to repay about $3 billion dues in upcoming payments until June, while $4 billion is expected to be rolled-over, central bank Governor Jameel Ahmad said. Last week, Moody’s Investors Service downgraded the nation deeper into junk citing fragile external position.

–With assistance from Ismail Dilawar.

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