Pakistan assures US of its commitment to IMF deal

Finance Minister Ishaq Dar on Thursday met with US Ambassador Donald Blome, informing him about the progress in talks held with the International Monetary Fund (IMF) and reiterated the commitment of the government to complete the programme.

Islamabad has been hosting an IMF mission since early February to negotiate a series of policy measures to secure $1.1 billion funding for the cash-strapped economy, which is on the verge of collapse.

The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical for Pakistan to avert defaulting on external payment obligations.

The deal will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks’ worth of import cover, and help it steer out of a balance of payment crisis.

Read more: Saudi Arabia commits financial support to help Pakistan secure IMF deal: minister

The United States is the largest cumulative contributor to the IMF at $155 billion and the largest voting bloc—holding effective veto power for many decisions.

The minister, during the meeting, spoke about the deep-rooted historic and durable bilateral relations with the United States on economic and trade fronts.

Dar briefed the envoy about the country’s economic outlook and the challenges being faced by it. He shared the pragmatic policy decisions being taken by the government in order to arrest the economic decline and to steer the economy towards a positive trajectory leading to economic stability and growth.

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The finance minister also informed the envoy on the progress in talks held with the International Monetary Fund (IMF) and reiterated the commitment of the government to complete the programme.

Donald Blome, on the occasion, expressed confidence in the policies and programmes of the government being taken for the economic sustainability of the country and the socio-economic uplift of the masses.

He extended his support to further promote bilateral economic, investment and trade relations between the two countries.

The two sides also exchanged views on matters of common interest and showed their interest in enhancing the existing bilateral relations between the countries. They also talked about various economic avenues in which both countries can further strengthen their ties.

Ishaq Dar reiterated the government’s desire to further deepen bilateral trade and investment ties with the US.

Last month, the IMF said Pakistan had made "substantial progress" toward meeting policy commitments needed to unlock loans the country needs to avoid default.

The international lender said Pakistan had a few more tasks before it could unlock a $6.5 billion loan to avoid a default, putting pressure on the government to secure assurances from countries that have promised financing support.

Esther Perez Ruiz, the IMF’s resident representative for Pakistan, said a staff-level agreement would follow once the few remaining points were closed.

The country has taken tough measures including increasing taxes and energy prices, and allowing its currency to weaken to restart the $6.5 billion IMF loan package.

(With additional input from APP)