Aliba Shahid
KARACHI (Reuters) – Pakistan and the International Monetary Fund have agreed to continue negotiations on a deal to delay payments crucial to sustaining South Asia. $1.1 billion in funding
Both Treasury officials and the IMF said talks that began late last week and ended Thursday did not result in a “board discussion” that would lead to the release of funds , the funds are part of the $6.5 billion bailout package signed by Pakistan 350.
This funding was initially expected to be disbursed last December.
“Virtual discussions will continue in the coming days,” Nathan Porter, head of the IMF’s mission to Pakistan, said in a statement, adding that considerable progress had been made. progress.
Pakistan Secretary Finance Minister Hamed Sheikh told Reuters late on Thursday that the IMF had asked for more time “for staff-level negotiations”. To release the funds, the IMF needs a staff-level agreement with Pakistan, which then requires approval from the IMF’s Washington headquarters.
Analysts say the money is necessary to prevent Pakistan from defaulting on its external payment obligations, while the IMF deal paves the way for other organizations and governments to provide funding.
However, any fiscal adjustments required by the agreement could fuel record high inflation, which reached 350.5% in January.
Finance Minister Ishaq Dar will address the media later on Friday.
In addition to the stalled portion, there is still $1.4 billion in the $6.5 billion bailout package that ends in June.
IMF funding is critical to the country’s billion dollar economy, which is facing a balance of payments crisis and foreign exchange reserves have fallen to a deficit Three weeks of import coverage. Last week, Prime Minister Shahbaz Sharif called Pakistan’s economic situation “unimaginable”.
