Finance Ministry plans virtual talks with IMF for staff-level agreement
The government coalition has made a wise decision by opting to soften its stance on the IMF bailout criteria and moving towards an early restart of the stalled loan programme. According to reports, the government has finally requested a meeting with the lender of last resort to resolve all outstanding concerns that have prevented the completion of the Fund’s ninth review for nearly four months and postponed the release of the subsequent loan tranche.
After a week of discussions and with input from the PM, unnamed government sources claim that all controversial issues have been resolved based on informal exchanges at the most recent Geneva summit.
The leadership’ willingness to go the extra mile to seal the deal, which is essential to stabilising Pakistan’s faltering external sector, is yet unknown. Indeed, those of the government’s senior financial officials who are especially opposed to the free float of the rupee would have their egos bruised by the adoption of IMF terms.
This is not, however, a compelling justification for delaying compliance with the IMF’s conditions. It’s also unclear if the IMF will consent to deploy a team by the end of the following week as the finance secretary has requested, or whether it will hold off until Islamabad takes the necessary steps to comply with its requirements.
Uncertainty persists regarding the leadership’ willingness to go the extra mile to seal the deal, which is essential to stabilising Pakistan’s faltering foreign sector. In fact, some of the government’s senior financial managers, who are especially opposed to the free float of the rupee, would suffer psychological damage from accepting the IMF’s terms.
This isn’t really a good enough excuse, though, to put off fulfilling the IMF’s requests. It’s also unclear if the IMF will consent to send a team by the end of next week as requested by the finance secretary or if it will hold off until Islamabad takes the necessary steps to comply with its demands.
