The IMF is making it difficult for Pakistan, which is in the midst of a crisis, to unlock a frozen bailout package because the lender has proposed a new requirement before signing a staff-level agreement.
The US-based banking institution has now sought a written guarantee of finance from friendly governments, including Saudi Arabia, Qatar, and the United Arab Emirates by June 30. This is after placing exceptionally strict conditions on bailout funds.
The government insisted that the executive directors of the KSA and other countries at the International Monetary Fund would submit a written promise. In this context, the Finance Ministry and the PM House discussed how to obtain a written guarantee from these countries.
Nearly all of the lender’s requirements have been met by the cash-strapped nation, including raising power and gas prices and enacting a mini-budget that included Rs200 billion in levies.
Islamabad concurred with the lender’s most recent request that it refrain from obtaining direct loans from commercial banks.
Pakistan would sign the staff-level agreement in the next days, according to Prime Minister Shehbaz Sharif, despite the ongoing delay. According to experts, political unrest in South Asian countries has become a major factor in the delay of a crucial agreement that may stabilise the economy. Although negotiations have gone on for months, no deal has been reached.
