IMF likely to announce EFF deal this week

Minister says all measures taken to clinch agreement, unfreeze $6.5b credit line

ISLAMABAD:

Federal Minister of Commerce Syed Naveed Qamar said on Wednesday that the International Monetary Fund (IMF) was likely to announce its staff-level agreement on the Extended Fund Facility (EFF) with Pakistan this week.

“Pakistan has taken all the measures needed to unfreeze a $6.5 billion credit line and expects to clinch the deal ‘any day now’,” the minister said in an interview with Bloomberg. After formal announcement by the fund, Pakistan will get a $1.2 billion tranche under the EFF.

The minister stated that the IMF agreement would give investors and creditors confidence that “Pakistan’s economy is now stabilising and it has taken all the right steps, so in that sense their money will remain protected”.

“The IMF programme is the beginning, not the culmination of all other monies flowing in,” he remarked.

The minister maintained that a pickup in imports, once the nation boosted its foreign currency reserves, would also benefit exports.

Limited reserves restricted Pakistan’s ability to fund imports, including the import of intermediary goods, and as a result thousands of containers of supplies got stuck at ports.

Pakistani authorities have taken steps including increasing taxes, cutting subsidies and devaluing currency to meet the IMF’s conditions, Bloomberg reported.

The National Assembly on Monday passed the Finance (Supplementary) Bill 2023, aimed at amending certain laws relating to taxes and duties. The bill proposed to impose new taxes of Rs170 billion to minimise fiscal deficit.

The lower house of parliament approved the mini-budget with majority vote in an almost opposition-free house where genuine opposition voices were missing.

Published in The Express Tribune, February 23^rd, 2023.

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