Talks on IMF EFF next month: Aurangzeb

Minister says US ‘very supportive’ in the matter

ISLAMABAD:

Pakistan will discuss an Extended Fund Facility (EFF) with the International Monetary Fund (IMF) in Washington next month, Finance Minister Muhammad Aurangzeb said on Friday, as the country looks to alleviate a full-scale economic crisis.

Cash-strapped Pakistan’s standby $3 billion arrangement with the global lender expires on April 11, and the two sides reached a staff-level agreement regarding the disbursal of the final tranche of $1.1 billion earlier this week.

"We have expressed our strong interests in an Extended Fund Facility with the IMF, but the quantum is not clear yet," Aurangzeb said at a media briefing, adding that the lender was "very receptive" to the request.

The US has also been “very supportive” in the matter, the minister said.

Prime Minister Shehbaz Sharif, after he was sworn in for his second consecutive term following a national election marred by allegations of rigging, had directed his finance team to begin work on seeking an extended fund facility from the IMF.

He termed a long-term bailout from the IMF "inevitable" on Thursday.

The IMF had also said it would support formulating a new economic program for the country if it asks for one.

Read also: IMF to release $1.1b after staff level deal

The global lender's rescue package last summer had helped Pakistan avert a sovereign default but, to secure it, the country had to revise its budget, and raise interest rates, taxes, and electricity and gas prices.

As a result, during the period, Pakistan struggled through inflation as high as 38%, historic depreciation in its currency, and contraction of the economy.

Pakistan will also look to bonds in the international market to help stabilise its economy, Aurangzeb said at Friday's briefing, adding that, in the meantime, work is being done on panda bonds.

"Once our credit rating improves, we will be going to the international market for bonds," he said.

The finance minister has been keen to capitalise on Pakistan's relationship with China and had earlier also expressed his intention to tap into the Chinese bond market.

In an interview to Bloomberg on Friday, he said Pakistan plans to sell as much as $300 million in panda bonds this year.