Pakistan hopes for IMF bailout decision in a day or two

Pakistan hopes a bailout decision from the International Monetary Fund will come in a day or two, its prime minister said on Tuesday, after a telephone conversation with the chief of the global lender. Islamabad has been waiting for a deal after taking policy and fiscal tightening decisions required by the IMF for the disbursal of $1.1 billion under the lender's ninth review of a $6.5-billion Extended Fund Facility agreed in 2019.

Pakistan hopes a bailout decision from the International Monetary Fund will come in a day or two, its prime minister said on Tuesday, after a telephone conversation with the chief of the global lender.

Islamabad has been waiting for a deal after taking policy and fiscal tightening decisions required by the IMF for the disbursal of $1.1 billion under the lender's ninth review of a $6.5-billion Extended Fund Facility agreed in 2019. Pakistan's finance minister Ishaq Dar added in an interview on Tuesday evening that the government was searching for a mechanism to receive all pending funds under the IMF programme, which would amount to $2.6 billion.

Prime Minister Shehbaz Sharif's said in a statement earlier in the day that he hoped consensus over the IMF programme's points "will lead to a decision in a day or two." The statement from the Prime Minister's office added that Sharif spoke to IMF Managing Director Kristalina Georgieva about the country's bailout funds, stalled since November. The two had also met in Paris on June 22.

With the bailout programme set to expire on June 30, Pakistan has also revised its FY24 budget and hiked policy rates to 22% in its desperation to clinch the deal, key to unlocking other external financing for the cash-strapped nation. Dar said that the IMF had demanded that the key policy rate be raised to 22% and that the review "will be done."

The IMF funds subject to approval by its board promise respite for Pakistan, which is battling its worst economic meltdown, with an acute balance of payments crisis and falling reserves of foreign exchange.