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International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, US, October 9, 2016. — Reuters
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Finance Minister Muhammad Aurangzeb has said that Pakistan is ready to strike a staff-level agreement with the International Monetary Fund (IMF) this week.
An IMF mission last week reached Pakistan without signing a so-called staff-level agreement on the second review of the Washington-based lender’s $7 billion Expanded Fund Facility and the first on its $1.4 billion Resilience and Stability Facility, which agreed to prop up the economy in 2024 after a severe financial crisis.
“The mission was on the ground for a couple of weeks, we had very constructive discussions with them around quantitative standards, structural benchmarks, and we are having some follow-up discussions,” the IMF told Reuters in an interview on the sidelines of the World Bank’s annual meeting.
“During this week, we are hoping to get the SLA done.”
IMF lending programs require countries to pass regular reviews, which, once signed off by the fund’s executive board, trigger the disbursement of the next tranche of IMF funding.
The IMF’s program helped shore up cash-strapped Pakistan’s $370 billion economy, which was reeling from record inflation, a rapidly depreciating currency and a large external deficit, until September 2024.
Aurangzeb had expected the government to launch a green panda bond – the first for Pakistan denominated in Chinese yuan – before the end of the year and return to international markets next year with bond sales of at least $1 billion, although details have yet to be decided.
“Euro, dollar, sukuk, Islam sukuk. We are keeping our options open,” he said.
Meanwhile, the privatization push—part of the long-pending sale of state assets under the economic reform and fiscal consolidation agenda—was expected to continue until the end of June in the fiscal year following disappointing results last year.
“This is something that is very important as part of our economic roadmap,” he said.
Pakistan was also making progress on the sale of three power distribution companies and national carrier Pakistan International Airlines (PIA).
“We are quite optimistic,” Yurangzeb said, referring to the prospect of qualified bidders for PIA after the opening of lucrative routes to Europe and the UK.
The transaction will mark the country’s first major privatization in nearly two decades. A previous attempt fell through after receiving a single low-ball offer last year, but the government has since drawn interest from five domestic business groups, including Air Blow, Lucky Cement, investment firm Arif Habib and Fuji Fertilizer.
A final bid is expected later this year.
Finch met with the director of the IMF
The finance minister was busy on the first day of his official visit to the United States of America for high-level meetings on the sidelines of the annual meetings of the IMF and the World Bank Group (WBG) in Washington.
Feinman Aurangzeb and his delegation held a key meeting with the Director of the IMF’s Middle East and Central Asia Department, and Jihad Azur, Director of his team.
The two sides exchanged views on Pakistan’s reform agenda and reaffirmed their shared commitment to maintain the current momentum of reforms.
The meeting reviewed progress under the second review of the Extended Fund Facility (EFF) and recognized the importance of maintaining fiscal discipline.
Earlier, Senator Aurangzeb also attended the meeting of Commonwealth Finance Ministers where he emphasized the importance of prioritizing concrete measures to advance a resilient and prosperous Commonwealth.
In another meeting, Senator Aurangzeb had an extensive engagement with World Bank Group Senior Managing Director Axel von Trotzenberg.
He appreciated World Bank’s continued commitment to Pakistan’s national development agenda.
The Treasury Secretary also held a productive meeting with the Assistant US Treasury Secretary for International Finance, and Counselor Jonathan Greenstein, Robert Kaprut, and Counselor Jonathan Greenstein.
During the discussion, the Finance Minister highlighted Pakistan’s strong economic fundamentals through the ongoing IMF programme.
He welcomed the successful conclusion of negotiations with the US administration that led to a tariff deal and briefed Treasury officials on Pakistan’s recent legislation to regulate virtual assets.
